By Ian Cook - Head of Workforce Solutions, Visier Analytics
Learning is a key part of work, and science says it will continue to be vital in the workplace of the future.
Without strong Learning and Development (L&D) programs, employees may have a harder time being productive, moving up in the organization, and contributing to financial performance. Additionally, it can also lead to lower employee engagement and increased turnover.
Despite the clear positive effects of learning, I’ve repeatedly heard from L&D leaders that they lack insights into whether what they do impacts overall business goals.
Without this capability, L&D is seen as an overhead rather than a competitive advantage. As Dan Lovely, Chief Learning Officer at AIG, put it: “We are in the skill building business. That need is greater than it has ever been before. For a long time many companies have talked about ‘people as our greatest asset’, but it is becoming a reality more than ever before. How could people not see the value of learning and development?”
So what is holding people back from seeing L&D’s value? L&D teams are struggling to measure the effectiveness of training outcomes.
Analytics is critical to the measurement process, yet according to a survey of L&D organization from Bersin by Deloitte, only 10 percent of survey participants say they are “very effectively able” to use data and analytics to respond to shifting or time-sensitive business needs – and the research shows that L&D’s reliance on Learning Management Systems (LMS) is to blame.
Learning Management Systems Can’t Do Learning Analytics
The LMS is a foundational system for most L&D organizations, and 64% of them consider custom LMS reports or dashboards “the most useful tool” for tracking, measuring, and evaluating learning.
Unfortunately, while an LMS is fairly good “at providing metrics such as learner satisfaction, enrollments, cost of training, and learner demographics, few are able to capture data that is useful outside of the L&D function.” Additionally, “L&D providers rate their L&D applications as useful in tracking and monitoring learning and delivering content, but less useful at reporting and analyzing.”
The lack of analytics support in current L&D tools prevents learning organizations from being more efficient, developing stronger relationships with clients and business leaders, and proactively providing the business with better data for decision-making.
Finance is numbers-oriented — if a team has six full-time employees and plans to hire four more this year, Finance counts that as 10 positions. Salary values are assigned to the 10 positions and that is the team’s total workforce budget.
From Finance’s perspective, there are “six filled chairs and four chairs to be filled for a total of ten chairs in Marketing Operations this year,” but the reality is that teams are rarely this stable.
At any point in the fiscal year, employees may leave the company, get promoted to a different position or team, or go on leave. Teams may need to fill more or less positions than they originally planned, but their ability to manage this type of churn is hindered by the basic way in which cost limits are allocated and the inflexibility of the plan monitoring process.
As a result, line managers and HR work within a budget that does not adjust to reflect the realities of their teams, often resulting in shortcuts (like hiring contractors) and workarounds (like delaying hires) that increase costs and decrease productivity.
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And this will only become more difficult to achieve as L&D functions modernize and incorporate new learning methods and devices into their technology stack, further complicating the process of tracking since most LMS’s can’t combine data from other systems in reporting outputs.
Without a complete picture, the L&D organization is hard pressed to answer the most important questions to their success, such as:
1. Does L&D make our employees stay?
With voluntary resignations at an all-time high and unemployment rates historically low, employee retention is a key objective for most organizations. L&D can address this problem because “when employees perceive that their organizations encourage career development, they feel more confident about their long-term career path.” In fact, a Culture Amp study found that people who stay with an organization are 24% more likely to say that they have had access to the learning and development they needed.
Use learning analytics to:
Surface insights on how L&D is impacting employee retention, such as what training programs produce the cohorts with the longest tenure and whether the savings from reduced turnover justify the costs of key programs.
With this information, you can determine which levers to pull to further increase employee retention based on the programs the data has revealed as most successful.
2. Does L&D help our employees perform better?
Simply put, strong performers can make the difference between hitting business objectives and missing them. In fact, 37% of High-Performing Organizations (HPOs) report above average revenue growth for 2016 compared to 20% of Low-Performing Organizations.
Performance is strongly tied to L&D, but without analytics, it’s difficult to tell how exactly learning affects employee performance. This is because human performance is varied and assessment needs to take place over time. Therefore, in assessing L&D impact, you need access to data from the entire employee lifecycle.
Use learning analytics to:
Get a complete picture of learning throughout an employee’s tenure at your organization. This is only possible if you have a learning analytics solution that can connect all your HR and business systems together – whether it’s your performance management, HRMS, or financial performance tool. AND look at the relationships in this data over time frames ranging from months to multiple years.
This single source of data truth enables you to track what the ratio of high-performers are to non-high performers who do training, how long it takes performance to improve after training, whether training and certification programs have an impact on improved financial performance, and more.
3. How does L&D contribute to employee engagement?
On its own, employee engagement is a traditionally difficult metric to measure. However, studies show that L&D plays a role in engagement scores: one study in particular suggests that 41% of the variance in engagement is driven by activities that learning and development professionals have the opportunity to influence. In turn, 70% of the variance in performance ultimately can be explained by the degree of engagement.
Use learning analytics to:
Examine employee engagement within locations, departments, and teams to discover if those who are highly engaged are the same individuals that have recently completed a professional development program. Likewise, learning data can reveal which groups have the lowest engagement, what factors may be contributing to this low score, and whether more training could improve the situation.
4. Who would benefit most from L&D?
Roles are becoming increasingly specialized, which means a “one size fits all” approach will not work. In fact, 68% of L&D providers indicate role-centric approaches (i.e., role-specific, individualized approaches to learning design and delivery) are “Very Valuable” or “Extremely Valuable.
By focusing efforts on those employees that are more likely to make a positive impact on the bottom line, L&D teams can create more specific career development programs that will hopefully increase profits and productivity.
Use learning analytics to:
Identify the individuals who have benefited the most from training over the past few years – these are your high performers who have been promoted within the shortest amount of time. You can focus some of your programming on this group. Likewise, look for the employees who have re-certification deadlines to meet as they should have priority.
You could also use cohort analysis to determine which other employees have the potential to be high performers based on common attributes with your current stars. These employees could benefit the most from a targeted career development strategy. Furthermore, you examine the common attributes of employees who have never done training to see what effect this has on performance and whether a new L&D program for this group is warranted.
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5. Would we be better off without a specific L&D program?
Knowing what’s not working is just as important as knowing what is. Just as great HR strategy shouldn’t be about making HR better but rather the business, the L&D organization must focus on business outcomes in order to prove that it is a competitive advantage.
When L&D professionals can tie learning outcomes directly to business results, it becomes much easier to determine what programs should be cut or reworked.
Use learning analytics to:
Compare learning metrics directly to business metrics so you can analyze whether, for example, a specific training program had an impact on this quarter’s financial results or if changes to manager training hours is linked to changes in revenue per employee on their team.
Modernizing Learning Measurement
Connecting learning analytics to business data has traditionally been contingent on time-consuming, expensive data warehouse projects or hundreds of person hours going through spreadsheets and generating reports from various HR systems. Both methods involve long and tedious processes, which prevent L&D teams from quickly acting on data so they can proactively make decisions that could impact the bottomline.
Another option is to look into cloud-based learning analytics technology, which connect HR and business systems together, and offer the end-to-end view needed to quickly answer L&D’s critical questions and measure their total contribution to business goals.
Access to those kinds of insights will not only help L&D run more efficiently, but business leaders will also have the facts needed to properly invest in their employees career development.
Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of Tucana.
