Skip to main content

Measuring the ROI of LXP Investments: Key Metrics and Insights

written by Sammir Inamdar January 19, 2024

Deploying a learning technology like LXP is by no means a small investment. It may often be tempting to simply leverage the LXP for training, guide employees to be comfortable with it, and then await positive outcomes for the company.

However, post-implementation, it is possible that the business results may not show the expected improvement.

Why does this happen? The reason is that training (and consequently use of learning platforms) is never a one-off effort. It is a continuous initiative that requires to be measured and evaluated to guarantee that your workforce has developed the necessary capabilities for their roles and your ROI is optimized over time.

This is why areas like L&D metrics need attention if you wish to measure the ROI of your LXP investment and evaluate the effectiveness of your overall L&D program. These metrics offer L&D teams valuable insights into whether or not the chosen tech like LXP is proving effective.

Role of Metrics in L&D

L&D metrics are the indicators that are used to assess the effectiveness of an organization’s training and development initiatives. Fundamentally, L&D metrics serve four primary purposes:

  • Assess the success of a specific training program (as well as learntech).
  • Gauge the effectiveness of training initiatives.
  • Align learning activities with organizational goals.
  • Evaluate the efficiency of individual training elements.

According to LinkedIn 2023 Workplace Learning Report, 89% of L&D professionals say that proactively developing employee capabilities is necessary for steering businesses through the dynamic industry landscape. Over the period since 2015, 25% of skill sets required for specific job roles have already evolved, and this figure is expected to double by 2027. It is evident that investments like LXP must undergo continuous evaluation to ensure that businesses not only meet current strategic goals and key performance indicators (KPIs) but also stay ahead of future demands.

Moreover, aligning learning with business goals is an important priority for L&D professionals and will remain so in 2024. Every aspect, from course content to training materials, must be curated to enhance learners’ capabilities and contribute to achieving desired business outcomes.

This emphasis on alignment highlights the significance of using employee training metrics for L&D even more. These metrics play a major role in discovering the success or shortcomings of investments like LXP.

Key L&D Metrics to Measure ROI of LXP Investments

Your key metrics are the ones that truly matter to the C-suite, as they demonstrate the tangible impacts of training on the organization.

Let’s look at some of the metrics that you should employ to gauge the effectiveness of your LXP investments.

1. Learner Engagement

This factor is the key determinant of whether your employees are motivated to participate in training programs. In essence, it signifies the extent to which a learner actively participates in the learning experience, showing effective engagement in the learning process, taking ownership of choices, seizing learning opportunities, and proactively seeking feedback.

An LXP is these days a preferred learning platform mainly because of its focus on engaging learners. It leverages AI and machine learning to deliver personalized learning experiences tailored to each employee. Recommendations for learning resources are grounded in practicality, considering individual employee profiles, interests, and historical training data.

However, the challenge lies in distinguishing between merely participating in learning and being genuinely engaged. There are instances when employees invest time and effort in a training course out of necessity rather than genuine interest. Therefore, solely relying on metrics like course completion rates, repeat visits for content, time spent, feedback and survey results, and assessment scores are not enough. It is also necessary to additionally delve into learner satisfaction, motivation, or impact to accurately depict learning engagement.

2. Cost of Training per Employee

This metric is related to the financial investment made for training each employee. Gaining insight into employee training costs helps in informed decision-making about justifying and establishing L&D budgets for investments like LXP.

The employee training cost is commonly computed with a straightforward formula:

The total cost of training/The number of participants in training = Training cost per employee

In essence, this approach involves trimming excesses. Is the expenditure on individual employees excessive? Then look at more more economical alternatives. Is the cost disproportionately high compared to training of comparable quality? Identify more cost-effective options. The focus is on evaluating training comprehensively to optimize the learning experience, spanning from the design phase to actual delivery for learners.

3. Knowledge Retention

Knowledge retention is the process of absorbing and storing information in long-term memory rather than short-term memory. It is a crucial metric to measure, as it indicates whether business-critical skills, behaviors, and expertise are being effectively applied in the workplace. In essence, it serves as another means to evaluate the successful transfer of learning.

Implementing knowledge retention strategies, such as constant reinforcements and periodic knowledge checks through assessments, significantly enhances training effectiveness. This approach empowers employees to retain more information and apply it effectively in their roles. The robustness of these strategies, including adding of assessments, directly correlates with increased productivity and improved business performance.

Continuous learning can be sustained through various methods including microlearning and social learning & knowledge collaboration via LXPs that seamlessly integrate learning into the workflow.

4. Impact of Training on Performance

This metric gauges how well training programs influence employee performance in alignment with the organization’s expectations for the transfer of learning. It essentially determines whether the training through LXP has achieved the desired business impacts.

To ascertain the extent to which performance has improved directly due to training, guardrails are set using methods like the Kirkpatrick evaluation model. This model establishes benchmarks for business outcomes, employee behaviors, and knowledge transfer simultaneously.

5. Feedback of Training

Training feedback is all about gathering insights from participating learners to identify areas for improvement. Different from training evaluation, training feedback is more subjective and should be collected promptly and effectively.

Although subjective, timely and well-crafted training feedback provides learners’ opinions on the training programs. While not all opinions may directly impact L&D initiatives, patterns in feedback may reveal underlying issues, such as misalignment with daily responsibilities, job roles, or organizational goals. This feedback helps in checking if the chosen learning platform like LXP is making training more streamlined, engaging and effective.

6. Ramp Time

Ramp time, aka time to proficiency, measures the duration it takes for an employee to acquire the necessary capabilities to perform effectively in a new job role. Typically, this metric is assessed in two scenarios: when a new employee starts their tenure and when an existing employee transitions into a new role.

Understanding how this metric reflects training efficacy is crucial. By developing the right capabilities at the right time for each learner, the time to proficiency is reduced. Incorporating a competency model alongside this metric illustrates how an employee’s proficiency has increased due to training, also showcasing the business impact of their enhanced performance.

Leveraging Technology to Evaluate Metrics

The days of L&D teams grappling with manual learning data collection are thankfully behind us. It’s now all about leveraging new technologies!

With learning systems like LXP that have in-built reporting and analytics, the process is well managed, saving time, effort, and money.

Here’s how technology can help better justify the ROI of your LXP investment:

Real-time Reporting: An LXP enables automated collection and real-time analysis of data on employee interaction with training. This includes metrics such as engagement with training materials, course completion rates and learning outcomes, facilitating faster identification of improvement areas.

Predictive Analytics: Centralizing and digitizing data allows technology to automatically run predictive analyses, unveiling trends and patterns in employee performance and training effectiveness. This rapid analysis enables organizations to identify issues and implement solutions sooner, leading to data-driven decision-making.

Mobile Learning: Addressing shorter attention spans and the need for learning in the flow of work, easily accessible methods like mobile learning have gained popularity. Employees can access learning materials anytime, anywhere, engaging in short bursts of microlearning without disrupting productivity.

Personalized Learning: Recognizing that employees have different capabilities and knowledge levels, LXPs leverage data on employee performance, capabilities and learning preferences in the best possible manner. This data is utilized for customized training programs, promoting more engaging and effective learning experiences tailored to individual needs.

Concluding Thoughts

L&D metrics play a crucial role to check the effectiveness of an organization’s training initiatives and investments in solutions like LXPs.

While evaluating L&D metrics is a vital step in the continuous process of measuring ROI, it is important to note that using one L&D metric in isolation is insufficient. It is necessary to measure them in tandem so that the comprehensive approach helps understand the complete extent of training impact and effectiveness.

Related Posts

BlogL&D Measurement
December 8, 2023

7 Steps for Effective Learning Impact Measurement in 2024

As another year comes to an end, most L&D leaders are busy planning their L&D…
Spread the love
Sammir Inamdar

As the Co-founder and CEO at Enthral, Sammir provides strategic direction to the company’s Marketing, Product, and Engineering functions. With his cross-functional domain experience, Sammir has been instrumental in ensuring the company's commitment to empowering global enterprises with digital learning is realized. He is deeply passionate about driving workplace performance and development and embedding science-based principles in Enthral’s LMS and LXP. A Computer Science alumnus of St. Xavier's College, Mumbai, Sammir began his career as an animator, eventually venturing into entrepreneurship. His journey includes leadership roles in product and enterprise sales within the Edtech sector in North America prior to founding Enthral. He enjoys reading in his free time and is also a comic book enthusiast.

Leave a Reply

Close Menu
Enquire Now