LMS, Learning Management System, training

How Learning Management Systems Increase ROI

by Alfred Novas

It’s never been more important than it is at this moment for companies to have learning strategies in place. Without a learning strategy, a company is set up for failure. Most corporate leaders have some understanding of this, which is why they invest precious funds into L&D programs.

Companies today are investing more money in learning and development than ever before. And that’s saying something, because these programs are not cheap; they usually end up costing about $4,000 per employee. This means an organization that employs 1000 people can spend at least $4 million per year on training.

Related: Calculate the ROI of transforming your training programs with an online learning platform.

<img alt=" how learning management systems increase ROI of L&D"src="https://topyx.com/wp-content/uploads/2016/09/learning-tools-header.jpg"/>Companies Invest in L&D to Close Skills Gaps

Why the current emphasis on corporate training? The answer, provided in 2014 by Forbes contributor Josh Bersin, is simple: the recession caused skills gaps, and company leaders are trying to “train” their employees out of this predicament. In the 2 years since Bersin’s article was published, the economy has strengthened, as has the average employee’s skill level. Still, skills gaps exist to a much greater extent than they should. Bersin explained that a whopping “70% of organizations cite ‘capability gaps’ as one of their top five challenges, but many companies also tell us that it takes 3-5 years to take a seasoned professional and make them fully productive.” This explains why most companies are investing seriously in learning and development programs. The question is, “Are companies getting a good ROI on their L&D investments?” It is in a corporation’s best interest to find out and make corrections until skills gaps are few and far between.

Are Corporate Training Investments Paying Off?

A hefty investment in L&D + implementation of training programs = capable employees, greater financial rewards, etc. This specific equation does not always add up. In fact, many corporate leaders are stumped as to why they are paying big bucks on training and not getting the results they want. The statistics mentioned earlier suggest that there is no lack of training in the corporate world. So what’s the problem? Why aren’t all companies making more money and employing more top-talent individuals? It could be that learning and development teams are too focused on programs and not enough on the experience of learning.

Why Program-Centric Learning Cultures Aren’t Effective  

Every organization has some type of learning culture. Even companies that are light on training have a learning culture, just not an effective one. Most companies, however, have a program-centric learning culture. This type of culture heavily emphasizes its training initiatives. Its main goal is to have employees cooperate with L&D programs so that they will become more skilled and productive, primarily through attending sporadic training sessions. It’s easy to imagine the cold, uninteresting tone such a culture sets in a company. Program-centric learning cultures, and their counter-cultures, were discussed in Deloitte University Press’ Global Human Capital Trends 2016. It stated,

“…Innovative companies are adopting new and expanded learning architectures. They see their role as not simply to push out content they have developed, but to enable employees to access content from a wide range of internal and external sources to create individual learning programs. To facilitate the effort to help employees ‘learn how to learn,’ L&D teams are building internal knowledge-sharing programs, developing easy-to-use portals and video sharing systems, and promoting collaborative experiences at work that help people constantly learn and share knowledge. The goal is no longer to craft a learning program but to move beyond programs to curate the learning experience.”

This is the type of learning culture—one that facilitates constant knowledge sharing—that companies would do well to create and maintain. It would be ideal for all organizations to have such a learning culture. However, it can be a struggle to make the leap from a traditional approach to training to one that increases a company’s ROI on learning and development (i.e., a culture that continually fosters the experience of learning). A social learning management system can make this transition easier.

An LMS Can Increase the ROI of Learning and Development Investments

Social learning management systems facilitate the journey from a program-centric corporate learning culture to one that is centered on the experience of learning. An LMS, though not a cure-all for a company lacking a useful learning strategy, provides the tools needed to equip workers with readily available, valuable internal learning resources. Also, an eLearning system helps connect users to external learning resources.

A learning strategy that doesn’t neglect an employee’s need for both internal and external learning opportunities is one that will be successful. A web-based learning management system can be a springboard that catapults companies into having a learning culture that obviously increases the ROI on learning and development program costs.