Organizations make steady investments in training and development programs every year. With COVID-19 and the resulting changes in workplace dynamics, the work-from-home mode has led organizations to rapidly make significant investments in virtual training.

As a result, today, more than ever before, learning and development (L&D) professionals need to be able to assess the business impact of their training programs. Doing so can help them determine which training and development programs are aligned to the business goals and update or modify the ones that aren’t.

The Challenge of Measuring Business Impact

While there is no debate on whether training professionals should measure the business impact of their programs, there are several challenges in actually doing so. Chief among them is the fact that there is no easy way to obtain analytics that can measure business impact.

L&D teams are constrained by standard reports in most learning management systems (LMSs), which do not measure impact. Even if L&D professionals know what they should be doing to measure impact, they often do not have the resources — both people and tools — to collate the additional data, analyze it and draw actionable insights from it.

Because of this challenge, either L&D professionals never attempt to measure impact, or doing so takes an inordinately long time. By the time the insights come in, it may be too late for the business to use them. As a result, the training investment in a given financial year may not impact business goals in the same year.

The Way Forward

To address this challenge, the first step occurs during the training needs analysis (TNA) phase, when L&D professionals determine which metrics they will use to determine training effectiveness and measure impact. Most use the following metrics:

• • The number of training registrations and completion rates.
  • Learner reaction to and feedback on the training and the trainer.
  • Assessment scores.

However, the crucial missing link is business metrics — that is, by making a specific training investment, what specific gain will the business see toward a goal?

The way forward is to combine L&D metric evaluation with business metric evaluation. Focusing on L&D metrics alone is inadequate; only when you use both types of data will you be able to determine the impact of your training programs on business.

Here’s an example:

Background

An organization invests in an enterprise-wide customer relationship management (CRM) tool for its sales and marketing teams. Over a short period of six months, the new tool will gradually replace the multiple legacy tools and spreadsheet-based trackers the teams have been using until this point.

The Training Need

Everyone on the sales and marketing teams needs training on the new CRM. The L&D team maps the training to the following profiles:

• • Set 1: sales executives, sales managers and sales representatives (must acquire three levels of tool proficiency).
  • Set 2: the marketing team (must be able to use the tool for all marketing activities).
  • Set 3: the chief executive officer and chief operations officer (must have a review of the dashboard, with a focus on analysis and actionable insights).

The L&D team develops training modules to achieve the required proficiency levels across the three audience profiles and selects assessment scores as the indicator of proficiency.

The Missing Business Metrics

What the L&D team didn’t discuss with the sales and marketing teams, however, was the anticipated business gain, once the team members have the requisite proficiency in the new tool and how they will measure it.

For instance, sales reps will save one hour per day after switching to the new tool (instead of wading through multiple spreadsheets), and they can use this time to increase their sales targets by 12.5%. This increase in sales impacts the business directly and is a great way to ascertain the impact the CRM training has on the business.

If the L&D professionals don’t do this collaborative quantification (the combination of L&D metrics and business metrics) at the beginning of the project, it will be impossible to track and measure the business impact of the training. As a result, it’s critical that they identify the metrics that will help ascertain the business impact of the training during the TNA phase. This exercise requires strong collaboration between the L&D team and the sales and marketing teams.

How to Measure Business Impact: The Kirkpatrick Model

One approach to measurement is the Kirkpatrick’s model of training evaluation, which measures not only training effectiveness but also its impact on business. Here’s how:

Level 1: Reaction

Objective

The exercise begins with ascertaining the learners’ reaction. Typical insights include whether the learners found the training to be relevant, engaging, and easy to internalize and apply.

How to Do It

Organizations typically measure level 1 through polls and online surveys.

Level 2: Learning

Objective

Level 2 validates whether the training met its learning outcomes.

How to Do It

The right assessment strategy is critical in determining whether learning actually happened. The key measure at this stage are the scores of a summative assessment. This feedback enables L&D teams to determine whether the training met its learning outcomes and, if not, to take any required action (e.g., reinforcement, remediation or supplementary learning aids).

Level 3: Behavior

Objective

Level 3 determines whether there is a change in the learner behavior that is directly attributable to the training.

How to Do It

Organizations typically measure level 3 outcomes by polling the learners and their supervisors after 30, 60 and/or 90 days. They measure behavior change through a combination of L&D metrics and business metrics. This feedback provides a crucial validation of internalization of learning and its application on the job.

Level 4: Impact

Objective

Level 4 determines whether the training created the requisite value for the business and impacted its key performance indicators (KPIs).

How to Do It

Organizations measure level 4 outcomes by tracking changes in business metrics that are attributable to the training program.

Determining the business impact of your training and development programs is a complex exercise with several inherent challenges. Hopefully, this article has provided you with easy-to-apply strategies that you can use to effectively measure the business impact of your training programs.