Discovering the E-Learning Real ROI
Hidden savings over traditional training
If you're calculating Return On Investment (ROI) on eLearning, make sure your equation factors in some often (substantial) hidden savings over traditional training methods: deduct travel, facility rental, instructor fees, printing, and storage costs. Then, add back in the time your staff won't lose time away from the job and the flexibility they will enjoy with eLearning. They now can take courses on their own time and/or during non-billable "downtime" at the office.
Calculation Factors
To calculate the total benefits, you must evaluate the tangible results of training and assign a monetary value to such factors as:
- increased productivity (units produced, items sold, forms processed, tasks completed)
- improved quality (less scrap, less waste, less rework of product, fewer defects)
- reduced turnover
- reduction in lost-time injuries
- reduction in workers' compensation insurance claims
- increase in customer satisfaction as reflected in an increase in repeat sales.
Hard Benefits
These benefits are often called "hard benefits" because they can be converted easily to a monetary value. Other training benefits such as improved communication, enhanced corporate image, improved conflict resolution, increased sensitivity to human diversity, improved employee morale, and increased employee loyalty are less tangible, more difficult to convert to dollar figures, and called "soft benefits."
Soft Benefits
Soft benefits are important, and although they cannot be directly measured, they can be inferred or indirectly measured by associated outcomes. One way to approximate the value of soft benefits is to ask experts within your organization to give a monetary figure for these intangibles. Talk to employees, managers, supervisors, and executives and then take an average of the numbers they give you.
ROI on Training Dollars
It's often difficult to demonstrate increased value of a company's
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