Ryan Austin is Founder and CEO of Cognota, helping professionals learn how to run L&D like a business.
Despite increased investments in talent and learning development (L&D), most organizations struggle to provide the metrics that CEOs and business leaders care about most: impact and return on investment (ROI).
A study by ATD and the ROI Institute called Measuring for Success: What CEOs Really Think About Learning Investments found that while 94% of organizations track inputs and indicators, only 4% measure ROI, and just 8% measure impact. Yet, 96% of business stakeholders believe impact should be measured, and 74% expect ROI analysis.
This disconnect presents a significant problem: If L&D cannot show impact, it risks being viewed as a cost center rather than a strategic driver. The ability to measure learning effectiveness is no longer optional; it’s a business imperative.
Breaking Down Measurement, Impact And ROI
One of the key challenges in L&D is the misconception that measurement, impact and ROI are interchangeable. While these concepts are interrelated, they serve distinct purposes:
• Measurement: The evaluation of a learning program against predefined objectives to determine effectiveness. It answers: Did the program achieve its learning goals, drive behavioral change and support business needs?
• Impact: The business outcome that results from learning. It measures whether behavioral change occurred, improved performance and influenced key business metrics. It answers: Did the program move the needle on business objectives?
• ROI: The financial calculation comparing the benefits of a learning program to its cost. It measures efficiency, cost-effectiveness, and business impact. It answers: Did the investment in learning deliver a tangible financial return?
Unfortunately, the industry often buckets these three into one vague category of “training effectiveness.” This lack of clarity can weaken L&D’s ability to demonstrate value.
Evaluation: The Foundation Of Strategic Measurement
Evaluation is the structured process of measuring a program’s effectiveness against business-aligned goals. When done correctly, it connects learning outcomes to business priorities. Key principles leaders can follow:
1. Align with business partners from the start. Define success criteria with stakeholders by identifying learner needs and business objectives before program launch.
2. Use the right data. Collect data at multiple levels, including input (business need and learner profile), reaction (participant experience), learning (knowledge and skill acquisition) and application (behavioral change).
3. Quantify soft and hard benefits. While some outcomes are difficult to measure, many can be linked to business performance, such as increased efficiency, improved customer satisfaction or cost reduction.
While measurement determines effectiveness, impact tells the story of how learning contributes to business performance. This is where L&D leaders can make the case for their function as a driver of strategic outcomes.
Common strategies to drive impact include aligning with corporate goals. L&D teams should:
1. Engage stakeholders: Collaborate with senior leaders to define success criteria and identify areas where talent development can contribute.
2. Review Business Plans: Analyze strategic plans such as strategy memos from your CEO or annual filings to ensure learning initiatives support organizational objectives.
3. Understand Market Context: Research industry trends to align programs with competitive needs.
Other common impact areas include increased sales performance, improved customer satisfaction scores, faster employee ramp-up time, and reduction in compliance violations.
As highlighted in my Training Journal article, “How to help talent and learning development teams automatically get a seat at the table,” L&D teams must move beyond tracking completion rates and focus on crafting compelling business narratives that resonate with executives.
ROI: Proving The Financial Value
CEOs and CFOs speak the language of financial outcomes. For L&D to be seen as a strategic business function, it must quantify the financial return of its initiatives.
The formula for ROI in training is:
ROI(%) = Net Program Benefits−Program Costs) / (Program Costs) ×100
Where:
• Net Program Benefits = Business performance improvements tied to learning (e.g., revenue gains, cost savings, productivity increases).
• Program Costs = Development, delivery, and administrative expenses associated with the training.
This formula can quantify the financial return on learning investments, helping L&D teams demonstrate measurable business impact.
Moving The Industry Forward
The shift from measuring outputs (course completions) to outcomes (business impact and ROI) requires an industry-wide mindset change.
Forward-thinking organizations are already leading the way by:
• Using AI-powered learning operations platforms to track business impact in real time
• Aligning learning analytics with financial KPIs to secure executive buy-in
• Implementing standardized impact frameworks to provide consistent measurement across initiatives
Final Thoughts
Strategic measurement in L&D is a necessity. Organizations that fail to measure impact and ROI may risk losing executive support and budget. By clearly distinguishing between measurement, impact and ROI, L&D leaders can elevate their function, strengthen business alignment, and secure their seat at the table.
The question for L&D teams is no longer “Should we measure impact and ROI?” but “How soon can we start?” When are you going to start?
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