Do You Have These 3 ROI Misconceptions?
This month’s focus is all about "Show Me the Money: Strategies for Calculating ROI of Learning Initiatives.” This week, let’s explore some common misconceptions about ROI in the learning and development (L&D) world.
Misconception #1: Key performance indicators (KPIs) and ROI are interchangeable.
These terms are similar but not synonymous. KPIs are specific measurements or data points within a larger strategic initiative. ROI measures the high-level success of those initiatives.
We also love this comparison by Sean Callahan:
- Imagine a book: KPIs tell you what happens after each chapter, while ROI tells you what happened at the end of the story.
To put it another way, if a grocery store bought new cash registers, then a KPI could be how quickly a cashier can checkout customers. The ROI, or impact on the business, is increased customer satisfaction because they spend less time in checkout lines. As your team calculates the success of your learning initiatives, make sure you’re using the right terms.
Misconception #2: ROIs are purely financial.
The conversation around ROI in L&D is not just about numbers — it's about understanding the value and impact of training on an organizational level.
Effective training programs can enhance employee satisfaction, foster a culture of continuous learning, and support the development of a resilient and agile workforce. These intangible benefits, while harder to quantify, are vital for long-term organizational health.
To evaluate these broader impacts, organizations can use surveys, focus groups, and interviews to gather feedback from participants and stakeholders. This qualitative data provides insights into how training initiatives influence organizational culture and employee morale.
Misconception 3: You can immediately calculate the ROI of learning initiatives.
As the kids say, naur. Not quite. Like we’ve covered in a previous post, organizations need time to realize the benefits of learning initiatives. These benefits can include:
- Reduced turnover.
- Strengthened morale.
- Increased innovation.
L&D teams typically want to measure the ROI of something they’ve changed. As the variety of change curve models demonstrates, accepting and committing to change takes time. Company leaders need to accept this reality. In fact, Simon Sinek believes that people “need to view [their] organizations as works in progress.” He describes this as an “infinite mindset,” or one that’s committed to continuous improvement. Change agents like training programs need flexibility — if something isn’t meeting its desired metrics, training teams need to adjust accordingly. We’ve said before that training isn’t a one-time event. Measuring ROI and sustaining its benefits takes time and a dedicated approach. While we can’t speed up change, we can help you measure it.
Realizing the Unboxed Vision
At Unboxed Training & Technology, we offer the training, technology, and team of subject matter experts you need to develop your employees and grow your company. Using a people-centric, data-driven approach, we take training from a tedious task to an exciting and engaging part of the workday.
We develop custom training content that’s built around your organization, from your products to your people. By identifying the specific needs of employees and the goals of your organization, we execute L&D strategies that contribute to business success.
We’re not just content developers; we’re your strategic partner. Contact Unboxed Training & Technology to learn more about our learning strategy and consulting services.
