HR managers face a tough dilemma when it comes to employee training, education, and development. On the one hand, learning is linked to engagement in the workplace. After all, if employees feel like they are progressing and gaining new skills or knowledge from a job, they will be more likely to work hard and stick around. On the other hand, company leaders always want to know the bottom line—the ROI or other benefits—which can be exceedingly difficult to measure when it comes to employee learning and development.
While it’s true that measuring the effectiveness of employee learning is difficult, it isn’t impossible. By measuring the right KPIs from the start, your department should be able to formulate a very real picture of the benefits and ROI that employee development is delivering. Here are a few KPIs that will get you started:
1. Retention rate
When employees feel like they aren’t going anywhere in their jobs, they leave. Ongoing training programs to develop new skills and competencies can add direction for many employees, which will often cut down on turnover rates.
As you implement training programs, be sure to measure retention rates on an ongoing basis. If you can show that retention is markedly higher for employees or departments that have undergone considerable training development, that’s a clear indicator that your program is working.
2. Employee performance
How you measure performance—and which KPIs you use to track it—will vary depending on what your business does, who you are training, and which skills you are trying to develop. However, employee training should have measurable effects on employee performance, and there should be several KPIs you can track accordingly.
For instance, in a sales environment, you could look at how many sales an employee closes in a certain pay period and how that number changes after the training takes place. You might also track the dollar value of the employee’s sales and the number of new accounts the employee brings in.
These KPIs can show how much your employee improves as a salesperson after going through a training program. However, they don’t always provide the full picture, because changes in sales statistics are going to fluctuate from one month to the next. Maybe your employee went through a sales course right before hitting peak season for your business (or slow season) and his or her numbers are therefore skewed heavily by factors totally unrelated to training.
To get a fuller picture, you should also look at reduction in errors, mistakes, and other negatives that training should help to eliminate. Going back to the example of someone working in sales, a training program might help a new salesperson internalize the company’s process for preparing and submitting orders and quotes. A reduction in sales errors and necessary revisions show that the employee is learning to do their job with fewer mistakes. Fewer mistakes also should mean fewer customer complaints, returns, and order cancellations, as well as more positive reviews and referrals. All these factors can be tracked and used as KPIs.
Again, the best KPIs in employee performance are going to vary depending on your industry. When in doubt, consult with managers in your company to brainstorm relevant indicators.
Your KPIs are also going to vary depending on why you are implementing training in the first place. For instance, if your business runs a customer support hotline and you have been getting a lot of complaints from customers, your training would likely be based on the types of complaints you’ve been getting and how employees can avoid them. For KPIs, you could track the number of complaints you get after implementing the training program, what those complaints entail, and whether there has been a noticeable change.
3. Peer Teaching
Often, the best way to maximize the benefit of training in your organization is also the best way to make sure your employees are absorbing and retaining the information they learn. Having employees teach peer training sessions after coming back from a course or program allows you to test them on what they learned without resorting to a written assessment.
For example, say your business recently paid for a few managers to take a course on a new piece of software you want to implement in the workplace. You could make it a condition of the training that the managers need to be ready to conduct their own software training program after getting back to work. If your managers can teach a course on the software with depth of detail and clear understanding, that ability would act as a KPI to tell you that they mastered the material.
The added benefit of using peer teaching as a KPI is that it opens up channels for knowledge sharing in your organization. By having key players in your company learn how to use new software and then asking them to pass that knowledge on, you encourage deeper understanding and application of any skills learned, ensuring wider-spread use of that knowledge in your workplace.
4. Recruiting benefits
A company with a strong training program can be a major draw for new talent. After instituting the program, look at recruiting statistics as KPIs. How many applications are you getting per job posting? Which percentage of employment offers are your first-choice candidates accepting? How many dollars is your company spending per hire? While you likely won’t see movement here right away, showing that you value your employees will certainly help with recruiting, and you can bet that company leaders will want to hear about those benefits.
A real-world example of employee investment paying off is Bonobos, an e-commerce apparel company founded in 2007. Recently, the company was featured on a list of “companies with awesome training and development programs” by the employment website Monster. Monster praised Bonobos for its workplace training programs, which prepare all employees for management positions. There is a clear emphasis on growth and advancement at Bonobos—the kind that lands companies on “best of” lists and brings in hundreds of applications for every job posting.
The KPIs that work best for measuring training effectiveness will depend on the type of training, your industry, and the overall scope of your training program among other factors. You will need to look at each KPI against the time, money, and resources you are investing in employee training. In most situations, focusing on the categories listed above—and determining how the specific examples relate to your organization—will allow you to measure the effectiveness of your training program. Use this information to get more support for employee development from executives and shareholders.