Building and maintaining effective talent pipeline is the key to implementing efficient succession plans. Hence, talent development today is the topmost priority for organisations. They are willing to invest more in L&D (learning and development) programs for employee development and growth. Amidst today’s challenging state of economy, business leaders should be careful in deciding where the company’s budget gets invested.

L&D programs budgets are under scrutiny more than ever. They are required to make sure that every penny invested into the program is well-spent and generates significant outcomes within designated timelines. Learning opportunities for managers and employees is often associated with long-term investment rather than a short one.

While it results in higher levels of employee promotion, retention, satisfaction, and overall better organisational performance, it seems that demonstrating L&D programs with real bottom-line RoI remains a challenge.

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So the question here is, how soon can HRs expect RoI (Return on Investment) from L&D programs?

According to LinkedIn 2017 Workplace Learning Report, 69 percent L&D professionals say that talent is the number one priority for their companies. To help employees develop their skills and support career advancement, leaders should provide L&D initiatives that align with company’s goals and objectives. The study reveals that among other skills, coaching, leadership communication, and team collaboration take the top spot on the list of skills training that employees seek and L&D professionals are providing in their organisations.

While there is no denying the fact, that continuous training is something that differentiates between stagnant and dynamic organisations, LinkedIn study finds that only 8 percent CEOs currently see RoI from L&D programs. While, there are several good reasons why calculating clear metrics and benefits from learning initiatives is important for each organisation.

Measuring RoI is not only useful to justify the efforts invested by organisation into L&D, it also makes it easier for companies to arrange and plan budget for future learning programs. This further helps leaders to gauge and measure the effectiveness of current learning initiatives.

However, when it comes to L&D programs, you cannot measure the RoI using purely financial model that involves numbers and quantity. Given that L&D deals with personal growth, leaders should find other variables to calculate the benefits of the program.

For example, instead of applying the conventional formula to count the monetary benefits, you can measure the effectiveness of your L&D strategy by comparing employee’s improved performance before and after the program.

The RoI can also be measured in other developmental areas, such as talent retention, improved performance, productivity and employee engagement. By closely observing and monitoring employee responses, you can tell if your workforce is happy or upset with the initiatives.

If they react negatively, employees will be less likely to share and practice what they learn. On the other hand, if you observe acceptance and positive attitude, then benefits derived from the L&D program will reflect in their workings,  improved productivity levels, enthusiasm and engagement towards the job.

Only when the team starts showing significant improvements in performance and behaviour, the organisation and HR management can be rest assured that the RoI on L&D programs is successful. While there is no specified time frame within which benefits can be derived as expectations set, HR leaders should sketch out a timeframe and minutely observe details to gauge the outcomes on L&D strategic organisational investment.

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