How to Save Money with Digital Badges in Learning & Development

    Discover how digital badges can significantly reduce costs by enhancing engagement, lowering turnover expenses, optimizing training investments, and eliminating fraudulent credentialing.
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    Manager exploring cost-saving strategies in learning and development

    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.

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    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.

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    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.

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    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.


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    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.

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    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.

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    ICF Combats Credential Fraud with Digital Badges

    The International Coaching Federation (ICF) saw its credential program grow dramatically from 35 to nearly 30,000 holders by 2019, resulting in increased misuse of credential marks. 

    Originally provided as simple jpeg files, ICF started seeing the sharing of fraudulent or expired credentials under its name, which tarnished ICF's reputation and increased the administrative burden of enforcing proper credential usage.

    To address this issue, ICF partnered with Credly to issue secure, portable and easily shareable digital credentials. Within two years of implementing this program, ICF tracked a 62% increase in active credential holders, a 5% rise in retention rate and a substantial decline in credential misuse.

    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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    The Bottom Line: Digital Badges Save Money

    From reduced turnover and training expenses to streamlined administration and enhanced marketing efforts, the cost savings and return on investment (ROI) from digital badges are substantial. By incorporating digital badges into your L&D strategy, you're not just investing in employee development, you’re investing in your organization’s financial health.

    Start saving money today with digital badges from Credly.


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