How to Save Money with Digital Badges in Learning & Development
Credly
With employees looking for more than just a paycheck — 55% consider growth and development opportunities more important than salary — investing in training is a requirement for any organization hoping to be competitive. Ignoring the desire for learning and development (L&D) opportunities leads to higher turnover and reduced productivity, with two out of every five employees willing to leave within a year if they don’t get training.
A strategic and effective L&D strategy is also a competitive must-have as technological advances, demographic trends and marketplace shifts push businesses to adapt. And as businesses change, so must the skills of their workforces.
Organizations are turning to digital credentials, or digital badges, to boost training effectiveness while also providing added savings from increased employee engagement, reduced turnover, higher productivity and other improvements.
For employees, digital badges provide increased skill visibility, motivation for continuous learning and the ability to personalize their learning paths. For employers, they’re a variable way to recognize and reward employees for their learning achievements. They also provide data that can help organizations improve training outcomes and target their L&D investments for maximum return on investment. Metadata embedded in digital badges, for example, shows what specific skills the credential involves, how they were learned and verified, and other details that provide granular data about workforce capabilities.
These and other benefits also translate into bottom-line cost savings. Here are seven ways digital badges in L&D can help organizations save money.
Tip 1
Reducing costs from disengaged employees
Disengaged employees cost companies 18% to 33% of their annual salaries. On top of that, when comparing a disengaged worker to an outperformer in the same role, there’s a $14,000 to $20,000 difference.
Companies with high employee engagement are 23% more profitable than those with poor internal cultures. Digital badges, by recognizing and rewarding employees, significantly boost engagement, increase productivity and lower costs associated with disengagement.
tip 2
Savings from lower employee churn rate
Replacing employees is costly and time-consuming, estimated at 6 to 9 months of their annual salary. For C-suite roles, this cost can soar to 213% of the role’s annual salary. Engaged employees, as highlighted by Forbes, are more loyal and motivated, with companies experiencing 59% less turnover and increased productivity.
Digital badges cultivate engaged employee development, boosting satisfaction and significantly reducing recruitment, onboarding, and training expenses. IBM reports that 87% of badge earners are more motivated to engage frequently with the company.
Tip 3
Cost benefits of enhanced talent mobility
Employees are likely to stay 41% longer with an organization that regularly hires from within, and people at companies with high internal mobility stay almost twice as long compared to their peers at companies with low mobility. Research shows that internal hires outperform external candidates.
Digital credentials facilitate internal talent mobility by providing clear, verifiable data about employee skills. This allows organizations to identify suitable candidates for new roles without costly external recruitment.
Tip 4
Reducing training and verification costs
Organizations spend an average of $1,280 per employee annually on training and development (ATD). Digital badges play a crucial role in optimizing these investments by providing verifiable metadata on employee skills.
Digital badges reduce costs by providing verifiable skill metadata, enabling targeted training that addresses specific gaps, eliminates redundancy, and allows L&D leaders to maximize ROI. Badges with expiry dates ensure skills remain current, prompting timely updates and maximizing training value. These standardized credentials also streamline hiring processes, saving time and costs associated with manual verification.
Tip 5
Reduced administrative costs
Managing paper-based credentials can be expensive. In an organization issuing 1,000 paper certificates annually, for example, switching to digital badges can save 126.7 hours of employee time plus $1,643 in annual expenses like distribution, shipping and materials. This results in total savings of more than $5,000 per year.
Calculate how much money your organization could save by switching to digital badges.
Tip 6
Elimination of fraud
The proliferation of fake credentials fuels a billion-dollar global industry. An estimated 65% of all résumés contain misleading information. This trend is attributed to fierce competition for jobs, with many people choosing to embellish their qualifications or claim qualifications to gain a competitive edge.
Digital credentials’ secure, tamper-proof nature reduces the risk of fraud. They safeguard the integrity of an organization’s credentials and also ensure that when an employer hires someone based on their credentials, what they see is what they’re getting.
tip 7
Reduced marketing and communication costs
Digital credentials’ online portability allows employees to share their earned badges on professional social media platforms, acting as an endorsement for the organization’s training programs and brand. In essence, employees become brand ambassadors, extending the organization’s marketing reach organically. They also strengthen the company’s “employment brand” — its appeal to potential employees — making it easier to recruit new people.
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