As companies invest more in Learning & Development (L&D), it’s becoming increasingly important to measure and track the return on investment. That’s why Udemy for Business surveyed L&D and HR leaders to better understand how organizations are proving the ROI of learning and how learning impacts key business outcomes like employee engagement and productivity as well as tenure, retention, and revenue growth. Download the State of the ROI of Learning Report here.
We took a deep dive into the amount of budget and time surveyed companies dedicate to learning and then mapped this data to how these organizations perform in terms of key business outcomes - like employee engagement, productivity, retention, and revenue growth - to gauge the impact of learning. While other variables may have also influenced these business outcomes aside from learning & development, we found some interesting trends.
A false sense of confidence
A considerable percentage (44%) of companies gave themselves a score of 5 out of 5 on their ability to measure the ROI of learning at their organization. On the surface, it appears encouraging that so many companies feel strongly about their ability to measure the ROI of their L&D programs. However, when asked about how they were measuring ROI, the majority of companies still rely on metrics like training satisfaction and completion rates.
According to the Kirkpatrick Model (considered to be the most widely used training evaluation model), training satisfaction and completion rates are considered “Level 1” metrics that measure how an individual reacted to the training. For example, did they like it? These metrics are foundational and essential, but not as comprehensive as evaluation methods used at the higher levels of the Kirkpatrick Model such as control groups or tracking employee behavior change. The fact that companies have rated themselves positively while still relying on Level 1 evaluation methods indicates we still have a long way to go on the ROI front.
Online learning can boost employee productivity
In our current fast-growing economy, many of us in HR are hiring and scaling teams quickly. Tackling employee productivity, particularly speeding up the time it takes for a new hire to become productive, is a key pain point for HR teams. Studies have shown the average time it takes for an employee to become fully productive is around six months. How can we accelerate this onboarding time?
In our study, we found offering online learning as a resource during the onboarding phase can make a difference. For companies that were able to turn new hires into productive employees in less than 6 months, we noticed 67% offered online learning as the primary L&D resource at their organization.
Efficiencies of personalized and accessible on-demand online learning over classroom instruction can allow for faster onboarding. For example, Udemy for Business customer ITX, a software services firm, encourages new hires to start learning before they step in the door by sharing online courses with them. This can include both customized company-specific content as well as online courses taught by subject matter experts. So when new hires arrive on Day 1, they’re not rookies. See how Udemy for Business can help your organization boost productivity and onboard new hires more efficiently.
A strong connection between engagement and learning
Our research also confirms a strong connection between engagement and learning. Offering a wide variety of on-demand online courses—from technical and leadership skills to personal development—can help keep employees engaged on the job.
We discovered employees at high-engagement companies spend more time learning than people at low-engagement companies. 52% of high-engagement companies have employees who spend an average of 31–50 hours learning per year compared to only 20% of low-engagement companies. However, there was an optimal amount of learning between 31–50 hours. After 50–70+ hours, the impact of learning on engagement tapered off. Check out our ROI of learning infographic.
To create a learning culture, it’s essential to give employees time to focus on their development, so they can stay up-to-date with the latest technical and soft skills. But at the same time, they still need time to focus on the day-to-day duties and responsibilities their job demands. This explains why the sweet spot of high engagement and high learning falls around 31–50 hours per year.
There also appears to be a connection between the amount companies spend on learning and how engaged their employees are. More high-engagement companies spent in the higher average price range of $2000–$2500 per employee annually on learning. 30% of high engagement companies spent an average of $2000+ per employee annually. In contrast, only 7% of low-engagement companies spent $2000+ per employee.
It’s clear organizations that care about their employees’ long-term growth and invest in learning & development--enjoy a more engaged workforce. See how Udemy for Business can help boost engagement at your organization.
Online learning also enhances learning engagement
Online learning doesn’t only lead to overall engagement—it’s also linked to learning engagement. After adding online learning, 64% of respondents said the average number of hours of learning per employee increased overall. For example, when TBC - a retail tire company - introduced online learning for the first time - they went from a handful of learners to 85% learning engagement in just a few months.
This trend aligns with the latest research on just-in-time learning—when employees have the opportunity to choose when, where, and what they learn, they tend to engage in deliberate practice which boosts learning engagement and retention. The short, “snackable” content of online courses like those offered by Udemy for Business make it easy for employees to jump in, focus on a specific skill or lesson, and immediately apply what they’ve learned.
Get more insights in the full State of the ROI of Learning Report. Download your copy here.
Cara Brennan Allamano is the Senior Vice President of Human Resources at Udemy and formerly led the People function at Planet Inc., Pinterest, and other San Francisco-based companies. She’s a proven leader who has successfully built People functions in fast-growing companies, aligned HR strategy with strategic business needs, developed departmental roadmaps, and grew HR/Recruiting teams from scratch to achieve aggressive growth targets while maintaining high levels of employee engagement.