Training your employees is an investment, not an expense.
You invest in:
- organizational performance
- quality of customer service
- health and safety of your team
- retention of your staff
And more!
Obviously, there are financial benefits that flow from this investment. Therefore, we can assume that there is a measurable return on investment (ROI) on your corporate training.
Using a learning management system such as Workleap LMS in your organization can decrease your expenses and increase your profits.
Which will certainly have a positive effect on your ROI!
Empower your organization with the skills-based canvas.
1. What to include in the calculation of the return on investment of your learning management system
You must first know your costs (expenses) and your benefits (income and savings) to calculate the ROI.
To calculate the costs, you must consider the price of your training platform, the time invested by your team to digitize existing content and the time to create new courses.
For the calculation of benefits, there are several measurable examples to calculate the return on investment of your corporate training. Here are a few examples:
Increase of the…
- company's performance by gaining employee skills (dollar/invoice, LTV, error rate, etc.)
- value of your business following the standardization and documentation of internal expertise
- revenue due to better dissemination of knowledge and customer service (NPS)
- speed at which new skills are put into practice (e.g. sales, customer service, business partners, etc.)
Reduction in…
- administrative costs for training management
- travel costs and equipment rental/installation
- costs hardware and maintenance (cloud-based LMS)
- costs associated with employee turnover
- risk of fines associated with regulatory standards
The following examples provide a high-level overview of ROI calculations and include only traditional factors.
When you consider the invariable gains listed above, you quickly realize that the benefits of an internal training platform are more than significant!
2. Case study: fictitious calculation of the return on investment of your online training platform
Case study #1 - Health and safety standards
You have 200 employees to train on the new occupational health and safety standards.
You plan to organize 10 sessions, bringing together 20 people at a time.
The classroom course is given in a full day (8 hours).
Its online equivalence can be given in 4 hours.
Details of associated costs (face-to-face vs online):
- Employee salaries*: $40,000 vs $20,000
- Training development: $1,500 vs $5,000
- Trainer fees: $3,000 vs $0
- Equipment and room rental: $1,000 vs $0
Total: $45,500 vs $25,000
Net savings of $20,500, or 45% thanks to online training.
* Hours x hourly wages x days of training
Case study #2 - Welcome and integration of employees
You have an average of 50 hires per year.
Your onboarding process is spread over a full day, i.e. 8 hours.
Its online equivalence can be given in 3h30, before the first day in the workplace.
Details of associated costs (face-to-face vs online):
- Employee salaries: $6,000 vs $2,625
- Training development: $1,500 vs $3,000
- Trainer fees: $5,000 vs $0
- Equipment and room rental : $500 vs $0
Total: $13,000 vs $6,625
Net savings of $6,375, or 51% the first year. The savings will then climb to 79.81% since the development costs were reimbursed in the first year.
3. Your turn!
Although these case studies are fictitious, they represent the reality of companies using a learning management system.
Above all, it is not uncommon to launch more than one project on your LMS! Besides, there are many ways to make your LMS profitable even faster.
You could already spread the cost of your platform over several departments of your company by creating various internal projects (onboarding, corporate training, customer service, leadership, etc.).
You already have annual training budgets?
Then check the Workleap LMS pricing page to see how it can fit into your budget!
Discover, manage, and grow your team’s skills to unleash their potential and retain your rising stars.
