Defining your L&D ROI metrics

by Lucy Boyes on Jun 3, 2021 4:11:04 PM

L&D 3 min read

86% of business leaders think employee development is critical for driving business outcomes, yet only 34% of them believe their organisation’s L&D efforts are impacting business outcomes positively.


How can L&D close that gap?

There is an endless number of powerful reasons why you might be interested in investing in a learning platform: it will help your organisation save time, maximize resources, and open up additional revenue channels, just to name a few. 

But In order to justify an investment in a new solution – and ‘get the yes’ – you need to be able to prove some hard numbers.

That’s why leaders in learning and development (L&D) must be able to determine the anticipated return on investment (ROI) for their new learning technology when trying to secure decision-maker buy-in.

We have compiled a list of considerations when building out an ROI assessment for your learning platform solution.


New employee training costs

New talent needs the right training to do their job sufficiently and excel at what they do, but training is a huge investment. List the resources required to get a new employee up and running and tie a cost to each. Include cost to train, cost spent on L&D staff and programs, etc.


Training deficiencies

As you’re considering a new learning solution, you likely already know there are shortcomings with the way things are currently done. Rather than qualitatively describing these deficiencies, break them down on a micro-level and tie a cost to each. Are training materials undergoing frequent revisions that require printing and reprinting? Are employees getting the right knowledge they need, from the right sources? Pick apart all individual costs dragging your training down.


New solution costs

Between scoping out new solutions, implementation costs, and solution training, it’s no secret that adopting a new learning platform will require immediate and ongoing investments of time, money, and resources. Don’t shy away from these costs or mask them when building out an ROI formula. Be direct about the costs tied to the new system with decision-makers – you’ll be thanked for it later.


Here are micro level analytics that would be valuable to determine.

  • Calculate the number and rate of employees hired
  • Determine the average cost per hire
  • Determine cost per hire by department, region, and role
  • Determine the costs spent on recruitment
  • Determine the variables used to measure hiring cycle time
  • Assess hiring cycle time


Onboarding & Training
  • Average time to onboard

  • Cost to train
  • Cost of updating training documentation.


Staff Turnover
  • Current turnover rate
  • Average cost per lost employee


L&D Departmental costs
  • Costs spent on learning and development staff.
  • Costs spent on learning and development programs.
  • Overall learning and development spend.
  • Establish the cost of managing paper-based systems.


LMS provision
  • Determine the costs spent assessing LMS vendors.
  • Establish anticipated costs of software implementation and training.


Other considerations
  • Partner training – work with partner channel manager/director/VP to determine:

  • Average time and cost of training partners
  • Whether or not partners that engage with training perform better


Customer training 
  • Work with customer success to determine:
  • Average time and cost of onboarding customers
  • The cost of customer churn
  • The potential return from customer training (selling training, upsell)


Potential revenue streams
  • Turnover from selling courses to partners and customers.


This information is vital to providing a case for ROI in L&D and we work in close and considered partnership with you to understand your structure, culture and values so we can align our solution more closely with your objectives. Our team will work closely with you to refine the information above and create key KPIs within the LMS that will help demonstrate ROI to business leaders.
Lucy Boyes

by Lucy Boyes
Jun 3, 2021 4:11:04 PM