Corporate L&D has evolved over the past 60 years, but one recurring question remains, how do we capture and demonstrate the added value of L&D? Recent interviews with 50+ CLOs reveal that many corporate learning departments struggle to show the organizational impact of their programs. Many think that ROI is not always the best and ultimate metric to determine the value of contemporary L&D.
This article enables you to create your own Annual Learning Report, offering an opportunity to boost your credibility and visibility for key business stakeholders.
ROI is not always the answer
There have been critical discussions around commonly used models, such as the Kirkpatrick’s model, to capture the added value of L&D. This model (Kirkpatrick, 1998), has served as one of the most popular frameworks for evaluating training programs for the last decade. Overall, research finds that Kirkpatrick, Philips and other models measuring ROI, do not fit contemporary L&D due to the lack of attention for continuous learning. As Kaufman 1996) states, the model only focuses on face-to-face training, neglecting other L&D activities such as informal learning. In a previous paper, based on research from Maastricht University, we proposed the Learning Performance Model (LPM) as a better alternative for today’s L&D.
“The real truth about ROI – the Learning Performance Model” describes how contemporary L&D better demonstrates added value with the LPM. As you can see below, the LPM is a two-step model that shows the added value of L&D to business goals, through improved employee performance. The LPM focuses on L&D interventions such as digital and blended learning, face-to-face training, and formal and informal learning directly impacting employee performance (both competence and motivation), resulting in effects on financial and organizational performance. Assuming that the LPM- model better fits to contemporary L&D activities, this article continues answering the question how to demonstrate the added value of learning and development with credible metrics.
The Learning Performance Model (LPM) – an alternative measuring contemporary L&D
CrossKnowledge Learning Institute (CLI) has conducted interviews with 50+ CLO’s and HR experts to gain insights in which key L&D metrics are commonly used. This has resulted in the Annual Learning Report (ALR) framework, an overview of key metrics that can be used to create your own Annual Learning Report and boost your credibility and visibility.
Credible metrics for L&D’s performance
Many CLO’s share similar frustrations about the continuous urge to justify the existence of learning and development, whereas other functions like marketing, IT, and finance do not have to prove an added value to the business. Based on interviews with 50+ CLO’s and HR experts, we noticed that many corporate learning functions struggle to prove this added value. An important reason for this struggle is the lack of credible metrics. Limited efforts in planning & identifying smart L&D objectives upfront makes creating credible reporting difficult. Furthermore, CLO’s experience limitations in data collection and analysis, both during and after learning initiatives. Lastly, respondents highlight the lack of structured reporting and professional communication as a cause for the struggle to prove the added value of L&D. There’s a general move among CLOs to explore new ways of convincing business leaders of learning’s competitive advantage with credible metrics.
Which credible metrics do corporate organizations currently use to capture the added value of L&D? This question has resulted in the below Top 10 List of KPI’s:
In addition to the overall top 10 metrics, we learned from our respondents that a demand for L&D metrics could vary between industries. For example, in the financial sector there is a need for overall corporate compliance metrics, complemented by local legal requirements that demand specific local metrics. The oil and gas industry is confronted with strict regulations for health & safety training that are mandated for all staff, requiring focused reporting providing evidence to be in line with industry guidelines and external regulators. Besides, the metrics should match organizational maturity – some corporate learning functions only need to report on the ‘L&D basics’ to their stakeholders. Others have grown further into a strategic business partner and are expected to show the impact of L&D for the organization, often integrated into benchmarking reports like the “Dow Jones Sustainability” index or Fortune’s “Best 100 Companies to work for” index.
Both the industry you operate in and the maturity of your organization can influence the specific requirements for strong credible metrics.
Ultimately, respondents have indicated that you need to have a structured approach in assembling a powerful overview of credible metrics. Different clusters should be identified on how L&D generates added value for the organization. Based on the LPM, two streams can be identified. First of all, which L&D activities does L&D deliver and how do they operate? This corresponds with the foundation of the Learning Performance Model, focusing on learning and development activities. Secondly, what is the impact on performance or effectiveness of these L&D activities? This is represented in the LPM by employee performance and business goals, addressing the effect of L&D activities on the employee and organization. Depending on the maturity of the organization, L&D should compile a strong overview of credible metrics that fits the organization. CLI has developed a framework for you that enable you to build your own Annual Learning Report.
The Annual Learning Report
The interviews with 50+ CLO’s and HR experts have revealed 6 different clusters with credible metrics, to create your Annual Learning Report. Based on the needs of your organization, you can select relevant metrics from the two streams labeled prior:
Which L&D activities does L&D deliver and how do they operate?
- L&D Basics: An overview of KPIs related to basic L&D activities delivered in your company. Which fundamental L&D activities are reported on
- L&D Efficiency: Besides basic L&D contributions, these KPIs show how efficiently L&D has performed. Has input been optimally used, to generate maximum output?
- Digital learning: Specific KPIs for organizations who’ve launched digital learning, an indication on the progression of digital learning. How well advanced is digital learning inside the company and is it paying off?
- L&D operations & achievements: An overview with quantitative KPIs and qualitative descriptions. How does the L&D department run their business?
What is the impact on performance or effectiveness of these L&D activities?
- General L&D Effectiveness: Indicators on the impact of L&D initiatives. To what extent do L&D initiatives impact employee performance and business goals?
- L&D effectiveness of specific strategic challenges: Indicators on the impact for specific strategic pillars for the organization. To what extent do L&D initiatives impact the performance of new employees or talent and leadership inside the organization?
The next challenge for corporate learning leaders is to move from individual KPIs to an integrated Annual Learning Report to boost credibility and visibility. The Annual Learning Report framework can support you in that journey. Delivering an ALR is strongly dependent on accurate goal setting, data collection, and analysis. It is important to stress that the design of your Annual Learning Report should correspond with your organization’s maturity and meets the needs of business & HR stakeholders. This implies that there is no one-size-fits-all annual learning report. Instead, these reports should be tailored based on the needs of key stakeholders.
Now that you’ve seen which different credible metrics are available as ingredients for your integrated Annual Learning Report, what are your next steps? How do you end up with an Annual Learning Report that boosts the credibility and visibility of your L&D?
How to boost your credibility and visibility?
Assuming that CLOs can further boost their credibility and visibility we recommend that they review the Annual Learning Report clusters and KPIs. After, they should initiate the following actions in parallel with their specific capabilities and environment:
- Analyze your organizational L&D reporting needs:
- Review your L&D actionable data collection capabilities,
- Select the Annual Learning Report KPIs that fit your needs.
- Draft a “1st edition” ALR and validate this with L&D and HR stakeholders.
- Based on feedback, draft a “2nd edition” ALR and validate this with business sponsors.
- Based on feedback, develop an organizationally tuned Learning Report framework. Set a goal of reporting quarterly to key L&D stakeholders and annually to the broader business or HR and L&D community.
A learning strategy is useless if it doesn’t align properly with organizational outcomes. L&D does not operate in a vacuum. The sole purpose of the learning function is not to simply deliver learning. Instead, its purpose is to equip and empower the employees and teams to achieve the goals of the business. The Annual Learning Report provides a strong basis to demonstrate L&D’s alignment with business strategy and contribution to business outcomes. We strongly believe that it can contribute to L&D leaders being perceived as credible and respected business partners. This also illustrates a track record of continuous performance and success, and provides the opportunity to focus on where to further invest in developing the organization.
Kirkpatrick, D. L. (1998). Evaluating Training Programs (2nd edition). San Francisco: Berrett-Koehler Publishers.
Kaufman, R., Keller, J., & Watkins, R. (1996). What works and what doesn’t: Evaluation beyond Kirkpatrick. New Directions for Philanthropic Fundraising.