Learning and development (L&D) is the most direct path to synchronize employee capabilities with business objectives. It is an undertaking millions commit to yearly, covering an array of subjects, from compliance to reskilling. The aftermath of COVID-19 intensified the significance of such initiatives, with enterprises ramping up their L&D investments.
However, only 8% of learning and development teams calculate their return on investment (ROI), leaving a majority of programs void of success metrics. Despite this, understanding the monetary implications of L&D is becoming increasingly important, considering its impact on revenue and profits. The traditional ROI formula, [(L&D Benefits – Cost of L&D) / Cost of L&D x 100], must be carefully assessed, considering not just financial investment, but time and effort as well.
Costs related to learning and development are multifaceted, extending beyond the explicit monetary commitment. It takes between 55 and 177 hours to generate just 20 minutes of corporate learning content. Moreover, employees’ sacrifice of valuable work hours to complete traditional courses contributes to the total cost of these programs. Tertiary costs such as transportation, venues, catering, and equipment also play a significant role.
However, investing in corporate learning has proven beneficial. Studies reveal that for every dollar spent on learning and development, revenue inflates by $4.70. Therefore, finding the right tool for the job is crucial. A science-backed microlearning platform helps measure the return on investment through contemporary key performance indicators (KPIs), whilst considerably reducing cost, time, and effort. Consequently, enterprises can effectively measure the learning and development return on investment, leading to improved confidence, productivity, and profitability.