Calculating the ROI of Your Learning Management Solution

Demonstrate the ROI Benefits of Your LMS

The return on investment (ROI) of any software is a crucial metric for organizations. When it comes to learning management platforms, it can be difficult to determine how best to identify and calculate the benefits of your LMS investment. In this article, we share 7 ways to measure the ROI of your LMS.

The Importance of ROI Calculation

A return on investment, commonly referred to as ROI, is one of many key performance indicators that companies use to measure the profitability and performance of a certain system or approach. In short, calculating your ROI helps organizations make more informed decisions about whether a certain tool or method is benefiting their company in the ways that they intended.

“By calculating ROI, you can better understand how well your business is doing and which areas could use improvement to help you achieve your goals.”

– Erica Hawkins, CallRail

This metric can be used to determine the efficiency of any business expenditure, including that of a learning management platform.

Being able to provide learning and training through a dedicated learning system has become paramount. But often the question still remains for organizations, “How do we measure the efficiency of this learning solution?”

The ROI of Company Learning

It’s frequently said that a company’s employees are their most valuable asset. So, it only makes sense that by investing in your employees, you invest in your organization’s efficiency and resilience.

That is why more and more organizations are adopting learning management systems to create better opportunities for their employees to develop through dedicated training. Research shows the long-term benefits of incorporating a continuous learning culture within an organization. For example, teams experienced improved employee motivation, retention, and productivity.

Aligning with these established advantages of company learning, here are 7 example measures and metrics organizations can use to guide their learning solution ROI calculation.

1. Employee Confidence and Productivity

Learning management platforms offer employees easy access to development courses, which simplifies and streamlines the training process. Plus, learning can be delivered in the flow of work. That means the information they need is always close by and in a familiar environment.

When employees can easily find the information necessary for them to perform well in their work, their confidence increases, and productivity boosts.

This is one way that organizations can begin to measure the efficiency of their learning systems. They can following employees’ work performance and even surveying workers on how confident they feel in doing their job after completing a certain training course or accessing learning opportunities.

2. Employee Engagement and Morale in Hybrid Work Environments

Workplaces have shifted to incorporate more remote and hybrid work styles. Thus, employees are now physically farther apart while still being expected to work closely together. Because of this, a central challenge that employees face is losing the sense of connection to colleagues and the company.

By utilizing a learning management platform that can be accessed from wherever employees may find themselves, a centralized space for employees to connect is created. This connection can be bolstered by learning systems that integrate with workplace tools, such as Microsoft Teams. These tools offer accelerated access to collaborative tools like interactive meetings, group brainstorming, and straightforward chats and team channels.

Using employee engagement and overall company morale as a measurement of your LMS investment can be a great way to evaluate the more personal effects the system has on your employees’ mindsets.

3. Quality of Teamwork

As mentioned above, with more remote teamwork, organizations can struggle to replicate the teamwork that happens in physical spaces.

A learning platform allows people within a team to learn, interact, and support each other without ever leaving the platform. It also enables management to give feedback and better analyze the progress a team is making through virtual channels.

With the agile tracking tools often available with learning management software, managers can monitor the quality of teamwork happening in the digital learning space. Plus, they can use the learnings as one of their measures for the LMS’ ROI.

4. Employee Retention

Using an LMS to build an agile employee onboarding structure, continuous learning programs, and career development paths can significantly boost employee engagement and overall retention.

Therefore, using employee retention as a metric for tracking the ROI of your learning solution can be a powerful way to measure the effect it has on your organization.

5. Learning Progress and Course Completion

With improved ease of tracking, organizations can use employee learning progress and the number of courses completed as ways to calculate the ROI. And they can monitor overall employee engagement with learning material.

With cues taken from learning management platforms for schools, HR should emphasize mobile access as a key feature to promote remote training.

6. Money Saved on Training

As the old saying goes, “time is money”. Digital learning platforms can save significant time on employee training. This namely saves organizations money spent on facilitating in-person types of learning opportunities.

LMSs offer employees easy access to learning in the flow of work, and on their own time. Therefore, the need for expensive in-person training diminishes.

The money an LMS saves on administering training is a common benefit to include when calculating ROI.

7. Security and Compliance Policy Observance

Compliance and security awareness training is relevant for all businesses, but for companies in highly-regulated industries, it is absolutely crucial. The cost of uninformed or uncompliant employees can be massive, especially when data breaches and policy fines are at play.

LMSs can deliver up-to-the-minute compliance and regulation support to employees, ensuring they are well informed about security and compliance regulations. By keeping staff working in a compliant way, the platform helps companies combat these high risks.

Therefore, measuring the cyber hygiene of your organization, through data security course completion, earned compliance certifications, and more, are great ways to calculate the security benefits realized from your LMS investment.

Identify the Impact of Your LMS and ROI

Having a dedicated learning platform has become an essential step in staying agile and competitive in the modern workplace. These platforms offer better development of your employees and increased collaboration among your teams. Plus, they can also create diverse benefits for your entire organization, as mentioned above.

While it can involve a significant initial investment, the ongoing benefits of implementing an LMS can create massive organizational improvements. With more metrics to calculate the ROI of your LMS investment, companies can clearly recognize the advantages offered.