The fallacy of ROI in L&D?

Through the life of an L&Der, there inevitably comes the question, what’s the ROI of training? It’s an interesting question, because something which is typically about behaviours and personal development is being forced to conform to conventional measurements a business is used to. And, importantly, it’s a valid question. A business needs to know they are gaining benefit from the overhead cost that someone (or team) is paid.

But I think what’s typically put as the ‘proof’ is a fallacy. Here’s what I mean. What’s the value you put on the relationships you build at work? When most companies will encourage a collegiate work ethic, there’s no actual evidence to suggest this makes a difference. Not really. Employee engagement surveys may suggest a workforce is happy or engaged or feels listened to. But there’s little to suggest having a collegiate atmosphere is any better than having a workforce which is mercenary. As long as the job gets done, and no one dies, and environmentally things seem to be amenable to helping people do good work, isn’t that what you need?

Abdi Ltd have a robust system of working out ROI, and it’s a strict methodology you have to follow to show the true cost of training and what this means for the business. It’s certainly a useful tool and system, I just don’t think it gives a true and full picture of what needs to be considered.

So why the focus on collaboration, sharing, learning and development, and all things intangible? Because if the self-help books are anything to go by, these are the things we should be focused on, right? And in particular, the books from the successful millionaires/billionaires seem to suggest it’s the soft things in life that make the difference. You know, listening, coaching, advising, etc. Same old, same old.

The question that L&D needs to be ready to answer is what are they doing to help the business achieve its company goals. That’s how it wins. That’s where the ROI comes from. Not from the number of training courses it delivers. Not from the number of people who have attended external events. Not from the number of managers who have had training. Not even from the tens of thousands (in some cases hundreds of thousands) of pounds spent on trainers, consultants and facilitators. They’re just figures which anyone can improve.

If I can’t tell you how I’m helping the company to achieve its goals then I’m not giving ROI. What that means is I have to be so explicitly a part of the business that managers know I’m a source that can help something get delivered. That may be an L&D event, it may be paying for an event, it may be facilitating a workshop. That’s where L&D makes its mark. Not through happy sheets, monthly training reports or budget reviews. Yes, they’re important. No, they don’t reflect what is actually done in any way whatsoever.

My old boss made the team fill out a set of activities which ‘measured’ what we do. This covered a range of activities we were meant to do which effectively became a list of ‘delivery’ items, and ‘non-delivery’. And every month we’d have a look at how we set our time against it. And it used to be fascinating. Most of the team would average 60%-80% delivery activity. That could sound scary for some people, and encouraging for others. Ultimately what it helped him to show the HR Director was how the team were using their time. I’m not suggesting L&D needs to be monitored via timesheets, but it does offer a better indication of the actual things done as opposed to broad figures and broad numbers.

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Sukh Pabial

I'm an occupational psychologist by profession and am passionate about all things learning and development, creating holistic learning solutions and using positive psychology in the workforce.

One thought on “The fallacy of ROI in L&D?”

  1. An interesting article – and a refreshing read. We are so often called upon to demonstrate the ROI that we deliver to businesses and it’s tricky. Don’t get me wrong, I’m really happy to look at how we can deliver value – it’s critical. The ‘so what’ of training has to be clear – otherwise it’s just another course that everyone will remember for a while and then go back to their old ways of doing things. But forcing measurement for the sake of it also isn’t the answer. In reality we need to look at a whole range of things – the hard measureables where it is appropriate and the softer, more subjective things as well. I prefer to look at benchmarks – identify those things that we can look at when a programme is starting which will give some focus to what we deliver and will form a start point to refer back to as we go through the programme – this can be a great way of measuring. We recently ran a course which looked at what behaviours people wanted to experience from a team and what they were currently experiencing – this enabled them to focus on developing those areas where the biggest gaps were.

    My only caution is to look out for companies and providers who don’t want to measure ROI at all. To me this is a sign of someone not being confident about the outcomes that they can deliver, which means that you might be wasting your money.

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