As a society, we spend hundreds of billions of dollars measuring the return on our financial assets. Yet, at the same time, we still haven’t found convincing ways of measuring the return on our investments in developing people.
And I get it: If my bank account pays me 1% a year, I can measure it to the penny. We’ve been collectively trained to expect neat and precise ROI calculations on everything, so when it’s applied to something as seemingly squishy as how effectively people are learning in the workplace, the natural inclination is to throw up our hands and say it can’t be done. But we need to figure this out. In a world where skills beat capital, the winners and losers of the next 30 years will be determined by their ability to attract and develop great talent.
Fortunately, corporate learning & development (L&D), like most business functions, is evolving quickly. We can embrace some level of ambiguity and have rigor when measuring the ROI of learning. It just might look a little different than an M.B.A. would expect to see in an Excel model.
Measuring L&D Impact
My company recently commissioned a study from analyst firm IDC to take a closer look at the ROI of companies investing in their employees.
While IDC’s findings don’t necessarily apply to all L&D solutions, they do make a compelling case for the upside of investing in employee development. It’s also true that L&D can’t succeed with the introduction of a single product; other conditions must be in place to reap the full rewards of a learning culture. However, those rewards can be significant. IDC’s research found companies
invest in their employees benefited from improved performance, as employees use newly gained skills to do their jobs better, and more effective onboarding, which helps employees achieve productivity sooner.
Of course, I believe rolling out enterprise-wide online learning is foundational to successful L&D, but, wherever they start, companies really need to strive toward creating true learning cultures. That means establishing structures and conditions so continuous learning can thrive, including giving everyone time and space to engage with learning resources whenever they need them. It also requires creating an environment where it’s safe for people to talk about making mistakes, which is crucial for growth and self-improvement.
It’s also worth pointing out that corporate leaders can’t just sign the contract with a training provider and consider their work done. The C-suite has to be actively engaged in learning, too, and model the behavior they want to see in the workforce. It sends a clear message when a CEO can stand up and talk about their own learning challenges and experiences—showing first-hand that everyone has to step up, adapt to a fluid workplace, and see upskilling as a necessary part of every career journey.
Learning Culture Delivers Maximum ROI
We all need to continue learning throughout our careers, from the greenest entry-level worker all the way up to the most seasoned CEO. Therefore, access to L&D can’t be restricted based on job title or tenure if companies expect to see a solid ROI. In a true learning culture, every employee is empowered to pursue training when they need it.
Today’s workers are accustomed to consuming digital content on their own terms (e.g., binging an entire season of a Netflix show in one sitting), and companies can help ensure the effectiveness of their L&D programs by putting employees in the driver’s seat too. The days of submitting a request, waiting for approval, and then trying to find a convenient time and place to learn are over. Business simply moves too fast.
All of this depends on having the right content available when people need it. There’s not much ROI from sitting through mind-numbing training sessions where half of the content is irrelevant or so dull that attendees simply tune out. We can’t keep pace with technological change if our learning content is outdated.
As with any digital transformation initiative, L&D can’t follow a “set it and forget it” approach it it’s going to
deliver ROI. To become a strategic asset, learning needs to be woven into the fabric of daily working life. Then, companies will see results that really add up.
This article originally appeared on Forbes.com.