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Measuring learning and development ROI – An accountant's perspective

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HC Online | 20 Sep 2012, 12:00 AM Agree 0
How many times have you wrestled with how to justify to yourself and the accountants of the world your L&D spend or even why individual programs have merit and justify the investment in them? Adrian Smith outlines a method of calculating ROI on L&D programs.
  • Greg | 20 Sep 2012, 01:39 PM Agree 0
    This approach seems well-intentioned but seems naive, given the apparent experience behiond it. It makes the flawed assumption that there is a direct link between skills and knowledge and behaviour change in the workplace. Behavioural change in the workplace results from the interplay of many factors, of which skills and/or knowledge is only one.

    Investing in learning and development without addressing the other factors influencing workplace performance is a waste of money.

    Monetising the value of behavioural change is also extremely difficult to do for many roles, particularly where teamwork or other forms of interdependence deliver value (and that's just the beginning - try defining the public value delivered by a government agency and the contribution of an individual)
  • Adrian Smith | 27 Sep 2012, 02:42 PM Agree 0
    Hi Greg

    Thanks for taking the time to read the article and post your comments.

    In relation to your comments about improved skills and knowledge and behaviour change, much independent research has been done which confirms a specific and direct link between improved skills and knowledge and behaviour change in the workplace.

    We acknowledge your point that other factors such as you mention can also influence the application of new skills in the workplace, and the futility of not also addressing these factors. We would argue that an effective training needs analysis will allow for these issues to be identified and managed so as to allow every opportunity for new skills to be displayed in changed workplace behaviours.

    Ultimately the impact of all of these factors will all be reflected in the ROI calculation as no behaviour change means no productivity improvements means a wasted investment. This type of no return scenario also raises a whole a series of questions to assist the L&D professional ensuring they do deliver high impact programs in the future, for example – Was there a fault with the training program? Where the skills transferred effectively? What personal or organisational impediments prevented the behaviour change? The answers to these questions are invaluable pieces of data which give insights and therefore strategies to creating a genuine learning environment in the organisation.

    We acknowledge your point about the difficulty of monetising the value of behavioural change for many roles, however please keep in mind we have written this article for a business audience, where the CFO or their delegate is a key stakeholder in any large business expenditure decisions such as L&D spend. The issue of measuring learning in a business environment has been a vexed one for a long time and many people have tried to get a handle on it, particularly since Donald Kirkpatrick first published his 4 levels model in 1959. We think that the ROI model, as challenging as it is sometimes to quantify benefits, is an important tool to help the L&D professional communicate with and influence key stakeholders.

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