Amazon has declared its commitment to invest $1.2 billion in employee training by the year 2025.
While few companies have Amazon’s financial resources, virtually all CEOs are worrying about their workforce. According to 2023 data from the Conference Board, talent is the No. 1 concern of CEOs globally. And both CEOs and CHROs say that retaining top talent is their top priority.
These statistics aren’t surprising. Nearly half — 45% — of top executives aren’t sure their companies will still be thriving a decade from now if they don’t change, according to PwC data. Much of that change is being driven by technology, but global shifts in workforce demographics and other forces are also factors.
The bottom line for the C-suite is simple: If their workforce doesn’t adapt and evolve, their companies won’t either.
For learning and development managers, however, fixing that problem requires more than just offering training programs. With corporate futures on the line, top executives want to be certain their training investments will pay off.
L&D leaders will be asked to measure the value of their learning and development initiatives, tying those efforts to fundamental business results and strategic priorities. Here’s how those training programs should be evaluated — and how to use data to tell the story of L&D’s impact.
Metrics Your C-suite Will Care About
Performance Improvement: This metric assesses the extent to which training programs have improved employee performance. The specifics will vary depending on job roles, departments and even the goal of the training program. But L&D pros should look at how business outcomes such as sales, customer satisfaction or quality control can be improved through training.
Cost per Employee: This metric measures the cost-effectiveness of training programs by analyzing the investment made per employee. It is calculated by dividing the total training costs (including development, delivery, and administration) by the number of employees trained. This metric helps assess the efficiency of training expenditures and can pinpoint opportunities to reduce costs without compromising training quality.
Productivity: Productivity metrics evaluate the impact of training on employee output and efficiency. They compare key indicators such as output per hour or per employee, reduction in errors, rework or waste, and time required to complete tasks. Organizations can use these metrics to demonstrate the success of the training and identify areas for improvement.
Remember that when it comes to productivity, it’s not just about making employees work “faster and better.” Upskilling and reskilling programs may be critical to other technology-based investments in productivity. For example, PwC found that many CEOS see artificial intelligence as an opportunity to increase productivity. But implementing AI successfully will require training to use the new technology. It will also increase demand for soft skills in the workforce.
Revenue Growth: This metric measures the extent to which training contributes to revenue growth — a top focus for most businesses. It can be assessed through indicators such as sales figures or revenue generated by employees who have undergone training, increases in average transaction value, or customer acquisition rates after training. Organizations can also include upselling or cross-selling metrics that indicate improved sales techniques and product knowledge. For example, Pearson’s iSell platform helped sales teams improve their skills, ultimately leading to increased revenue.
Employee Retention/Satisfaction: Employee retention and satisfaction are valuable indicators of how engaged, loyal and productive employees are. When employees don’t get the tools, training, time, and resources to do their jobs well, they become unhappy. McKinsey found that 54% of employees quit their jobs because they didn’t feel valued by their organization. Lower employee turnover means less money spent to recruit, onboard and train new hires — a clear bottom line benefit for any organization.
Employee satisfaction surveys, training program feedback and retention rates of employees who received training vs. those that didn’t are all data that helps tell the story of how L&D impacts employee retention.
Digital badges, which employees earn when they complete training that verifies they have specific skills, can further motivate employees. Employers who award these digital credentials communicate to employees that they value them. And workers often appreciate the opportunity to share their accomplishments.
Digital credentials also provide a valuable source of verified training and skills information that L&D leaders can use to evaluate training participation and effectiveness. And digital badge data, when tied into other workforce metrics, can help C-suite leaders understand the impact of training.
Presenting L&D Data Persuasively
By analyzing the data described above, L&D professionals can gain insights into training effectiveness and efficiency, and its impact on organizational goals. Presenting this data to the C-suite in a clear and concise manner is crucial for securing buy-in and continued investment. Here are some tips for presenting data effectively:
- Use Clear and Concise Visualizations
Present data using graphs, charts, and tables that are easy to understand. Visual representations help convey complex information quickly and clearly. Keep these simple and focused on a few key metrics.
- Relate Metrics to Organizational Goals
Make sure to link L&D data to the organization’s strategic initiatives and goals. This connection will help the C-suite see the impact upskilling, reskilling and other development programs have on business success.
- Use Storytelling Techniques
Illustrate the impact of L&D initiatives through stories and examples. While data may help “prove” a point, anecdotes and examples make the data more relatable and memorable for leadership. Stories can also help humanize the data — explaining what the numbers actually mean for the organization’s employees and customers.
- Report Regularly
Regularly report on these metrics and include actionable insights. Frequent updates keep the leadership team informed and engaged with the impact of L&D initiatives, and insights help explain how L&D leaders are using the data to enhance and improve learning programs.
Of course, none of this is possible without access to date. That’s why 87% of CHROs are investing in skills-based talent infrastructure. With the built-in analytic tool available on the Credly platform, organizations can gain further insight into employee interest, participating in and engagement with different training programs. Credly’s platform helps organizations implement and measure training programs tailored to their and their company’s specific needs.
Engage Executives in L&D Strategy
By aligning L&D initiatives with business goals, delivering value to employees, verifying skills with digital credentials, and leveraging future trends, organizations can maximize the impact of their L&D investments.
Complete the form below to learn more about how to optimize your employee training budgets and maximize L&D’s ROI, download our whitepaper.
June 26, 2024
Credly Team
6
min read
