ROI with person using a learning management system
Insights | August 11, 2021

3 ways L&D teams can measure the ROI of using an LMS

4 minute read

Your first step to showing the ROI of an LMS is to set benchmarks and measure success

By using a learning management system (LMS), L&D teams can help engage and develop their people. But if senior leadership teams want to know the value of an LMS and want more information on the return on investment for their organisation, what should you do?

“With any sort of system investment, you obviously want to make sure that your money is being well spent,” says Digits’ Andrea Matkin. “A good LMS is going to help support a number of things in your organisation, including staff retention, career development, the time you spend on admin tasks and more.”

Here are three ways L&D teams can measure the ROI of using an LMS.

 

How to measure ROI in learning and development

1. Ask yourself how you measure success

Before proving how valuable an LMS is for your organisation, you need to have benchmarks in place to measure success.

“If you haven’t got benchmarks or a view of what the pre-system status quo was like, you’re not going to be able to reliably measure the return on investment of an LMS because you don’t have anything to measure it against,” says Matkin.

She adds: “You need to have a clear picture of where you are starting from.

“You might see that staff aren’t performing to the levels that are expected in certain areas. Revenue turnover may be lower than expected or staff turnover may be higher than you hoped. You need to have metrics in place to track this, and then you’d measure that over time to see how having a robust learning programme in place has impacted those areas. But you should have some measurable targets in place to help you track the progress of the LMS.”

If you want to track the success of an LMS against your learning KPIs, you also need to ask yourself questions such as how much mandatory training employees are required to do, how much time is provided to employees during the day to engage with learning, and how many learning activities are available within the LMS. Once you have the answer to these questions – and have taken the context of learning into account – you can start to measure the value of an LMS.

2. Track performance

How do you track performance? From looking at customer satisfaction scores to measuring productivity, each organisation is different in the way it tracks performance. By tracking the impact your learning management system software has had on the way employees work, you can see if the LMS is paying off.

“You need to take your performance measurements and look at that in conjunction with your learning measurements,” says Matkin. “You should look at things like the training employees have completed and ask yourself what were their results and scores when assessed on their learning? How much training in a certain area have they done in a period of time that aligns with the other measurements you’re looking at?”

Take a look at the average pass rate/score for employees and see who is scoring best on learning activities – you can then track this against performance measurements and see if what they are learning has been put to use.

Also test employees on how much knowledge they have retained over a period of time (by comparing assessment scores around the same learning over a period of time) to see if the learning materials within the LMS are being taken in by employees.

Matkin adds that you can also show the ROI of using an LMS by showing how much admin time has been saved as a result of an LMS. “Take a look at how much time has been saved by automating processes and by having templates set up to handle tasks. With an LMS, for example, your L&D teams aren’t having to spend time booking training courses for employees or tracking this in a spreadsheet, so time is likely to be saved – you should track the amount of time saved and see where it has been refocused instead.”

3. Employee engagement

If you have invested in an LMS which employees aren’t using, then it can feel as though the system may not have been worth the money.

In order to find out if employees have engaged with the LMS, take a look at the average number of activity completions per user over a period of time, find out what number of staff have achieved X amount of badges/reward points and track what pages users are navigating to within the LMS when they log in (i.e. to show which areas of the platform are being under-utilised or popular).

If results show that employees are actively using the LMS, you can inform senior leadership that employees are engaging with learning and taking responsibility. If the results are low, these provide a starting point to ask the crucial questions needed to inform your engagement strategy moving forward, such as, is the learning content relevant? Are managers supportive of their team’s learning needs? Do employees know where to go to access learning?

Another way to highlight employee engagement, to show the ROI of using an LMS, is by collecting employee feedback. Find out what the average feedback rating is across all learning activities (or for single activities) and use this to show how much of an impact the LMS is having on learning engagement.

Request a demo to find out more about Digits’ learning management system, Digits LMS. You can also download our brochure for more insights.

Written By Maryam Munir

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