Learning & Development

The Elusiveness of L&D ROI

One of the biggest challenges learning and development (L&D) professionals face is showing management there was a return on their investment (ROI).

Sure, good L&D teams can point to concrete and important achievements like fewer accidents and higher scores on employee satisfaction surveys. But at the end of the day, companies are in business to make money.

Applying Value to Satisfaction and Safety

Employee satisfaction and reduced accidents probably mean the company is more profitable; after all, companies with happy employees tend to have less turnover, which is costly, and those employees tend to be more productive. Similarly, fewer accidents tends to mean lower overall costs and, therefore, higher profits.

But this logic still doesn’t create a clear, dollar-for-dollar link between money spent on L&D and company profits. That can be a big problem for L&D departments when it comes time to cut costs.

Although L&D is now thought of as a competitive differentiator, many initiatives are still viewed merely as another check in a box rather than critical business strategies. L&D needs to align with business goals and requires an appropriate allocation of resources and budget to ensure it’s done right.

Finding Alignment with Business Goals

As a new white paper from KeepWOL highlights, when done right, the cost benefits of L&D are innumerable. L&D is an integral part of organizational success because it taps into the potential of participating team members and encourages them to be more passionate about the work they do. It’s far more costly to ignore staffing issues and try to swap out underperforming employees for new hires than it is to put together a talent development plan that addresses employees at every stage of their professional journey.

L&D departments have the dual task of not only creating value for their organizations but also ensuring the organization recognizes that value. This can be tricky when there’s often not a clear line between a dollar spent on L&D and the corresponding impact on the organization’s bottom line.

Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.

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