What destroys L&D’s ROI faster than anything else

This article originally featured on TrainingZone.co.uk, where it received over 1,000 views.

Return on Investment (ROI) is super important for businesses, and individuals too. It makes sense – we care whether the amount of value we receive for an investment of time and/or money is ‘worth it’.

Following the recession, many organisations are now busier and more focused on ‘doing’ rather than developing.

As a result, lots of recent articles on TrainingZone have commented on the perils L&D face when challenged on the ROI they provide to the business, and how we can measure this. Including:

These are excellent articles and all worth a read.

However, in this article I want to highlight a single issue that has the potential to destroy more ROI for L&D than anything else.

The issue is that of ‘utilisation of development resources’. Or more simply, ‘level of attendance on training’. This is essentially how much your development resources (including training courses, elearning, development programmes, coaches etc.) are used, vs. what is made available.

Training attendance can quickly destroy L&D’s ROI as…

Training attendance has a significant, measurable impact on ROI

Whatever return your learning resources are expected to provide (for the cost of providing them), it can be drastically decreased if resources are not used by employees.

Let’s say you expect a sales training program to help attendees to increase their sales over the course of the year (by up to £30k gross profit on average, per salesperson). You might expect 10 people to go through the program, and you’ll pay ~£50k for designing and delivering the program, and expect the cost per person who shows up is ~£1k each (time cost etc.).

As a result, you’d expect a handsome ROI of 500% (£30k x 10 (attendees) / £60k).

However, if only half the expected attendees show up, this reduces to 272%. And if only two people attend, you are practically breaking even.

For other courses (such as time management), the ROI may be even tighter to start with!

Poor attendance is very visible to managers and employees

Some metrics in your organisation have low visibility – such as % of people planning to leave in the next year, or the total amount employees learn.

However, poor training attendance is easy to see. Emails announcing a ‘course has been cancelled due to lack of interest’, half-empty rooms, and employees moaning that they don’t receive sufficient development, all paint a picture of an L&D department that is not delivering sufficient value.

Attendance tends to go from bad to worse

With this greater visibility comes another problem – when people see training isn’t being well attended, they will assume (rightly or wrongly) that the training being provided isn’t worth attending.

Trainers will be frustrated or depressed by the lack of interest, feeling the effort they put in isn’t being valued… And so course quality drops too.

As a result, attendance (and the role of L&D) spirals downward, until business teams start sourcing their own development resources and barely engage the L&D team at all.

Conclusion

So if ROI is a key concern for your L&D team, review the extent to which employees use your resources (including, but not limited to training attendance) and see if it’s undermining your efforts.

Be aware that improving this area has the opposite impact – good attendance tends to spiral upward when courses are in demand, and so too the ROI (and importance) of L&D.

You can learn how to improve training attendance by watching a recording of a webinar (co-hosted by Jon Kennard and me, Alexis Kingsbury), called the ‘3 Steps to Improve Training Attendance’. It covered practical steps, tips and examples to help you improve attendance on your programs. Click here to find out more.

About The Author

Alexis Kingsbury

Alexis is founder of the Parentpreneur Accelerator and Making Greatness Ltd. He is a serial entrepreneur, with experience creating start-ups in a variety of areas, particularly in SaaS and EdTech. He is also a lucky husband and proud dad, and now helps other 'parentpreneurs' like him to achieve their dreams of having successful businesses, making a difference in the world, and spending time with the people they love.

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