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By now, most of us understand that Learning and Development (L&D) is essential to a comprehensive HR strategy. However, we as HR practitioners want to know how to persuade our stakeholders regarding the business need of L&D! Is this just another hype? Will this lead to actual ROI for my business? How do I track the relevant metrics? What are the numbers?
1. Increased employee engagement
Harvard Business Review (2016) found that effective L&D see 9-15% increase in employee engagement. This finding is extremely relevant as businesses in Singapore scored below average in terms of employee engagement compared to its Asian counterparts such as India and Thailand who are leading the ranks.
With L&D facilitating more microlearning (i.e. provide bite-sized, timely, easily accessible learnings), gamification (e.g. individual quizzes, friendly competitions) and increased feedback (e.g. strengths, areas of weaknesses, managerial feedback), employees feel more engaged even as some L&D practices move online. Businesses who are highly engaged with their employees also achieve up to 59% lower turnover rates.
2. Decreased turnover rates
Learning and development (L&D) lead to as high as a 72-point decrease in turnover rates. Learning and growth opportunities not only attract new talents, but can also help retain 93% of the Millennials (expected to make up 75% of our workforce by 2025) who quoted leaving their company in search of that growth. Naturally, this also means saving on rehiring costs e.g. man-hours to search for new candidates, interview, and retrain.
A study on the travel industry in Asia finds L&D to be the most important factor in retaining a millennial workforce. While previous studies have found employee resistance to be one of the main challenges in implementing e-learning in the workforce, the defining characteristic of millennials as a digital savvy generation mitigates this concern.
3. Increased sales revenue
When organisations focus on strengths-based learning, 90% of these organisations see 10-19% increase in sales. This is likely attributed to what IBM (2014) found, where a well-trained workforce typically increases productivity by roughly 10%. Highly engaged business units also achieve 10% increase in customer ratings, 20% increase in sales and 21% greater profitability. On the other hand, businesses where employees are disengaged may face costs of up to USD550 billion annually.
SAP integrations can normally be solved by their implementation partner as the tools and training have already been provided for them to do so. CSOD however, works with clients themselves in order to solve technical problems. This practice could contribute to a longer process than SAP.
4. Decreased training costs and man-hours
Last but not least, moving to e-learning means there will be a decrease in training costs, especially for companies who fly their trainers to various countries to standardize their trainings. No more need to rent additional hotel rooms, travel expenses, or several seminar rooms to conduct face-to-face trainings in. Companies like Kellogg have moved to e-learning as the setup is typically one-off and the learning can be scaled easily (barring any country-specific scenarios).
Through a sophisticated learning system, organisations not only get access to a greater variety of content but are also able to avoid redundant purchasing of content. A case study from Forrester finds that Content Curation tools provided by Cornerstone OnDemand saved a business up to 50% (roughly USD 1.25 million) in terms of training cost. Large external libraries are replaced by internally curated and created content. We discussed a blended approach in combining in-house content creation and curation with external libraries in this article.
Conclusion
In all, your organisation’s ROI is likely proportional to the size of your business. This is mainly because larger corporations are able to reap the economies of scale – with the increased sales revenue, employee engagement, decreased turnover rates, and decreased training costs and man-hours.
So, is L&D right for you? Reach out to us at TalearnX to learn more about cutting-edge Human Capital Management solutions that can help you facilitate this process!
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