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Justifying eLearning: ROI and Key Metrics

Why is eLearning indispensable for the company? Why does it need special (and increasing) budget? Like any other cost center in the company, L&D department has to show that it delivers real benefit to an organization. Find some effective eLearning ROI calculating methods, key metrics, calculators, and templates in this article.

It isn’t always easy to prove the worth of eLearning. L&D specialists need to demonstrate the value of eLearning in order to get support within the company.

You can easily name a number of reasons why a company should take advantage of eLearning programs. Flexibility, standardization, repeatability, accessibility and convenience are the first to come to mind. But the senior management's opinion can differ.

This is a brief review of our study on eLearning ROI calculation. Also, you can download the full version of the white paper.

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What Do We Do Instead of ROI Calculation?

Approaches

Employees’ Feedback

Often L&D departments collect feedback from the employees to understand how well the training was perceived. It is valuable but it has nothing to do with the real and tangible impact of eLearning.

Control Questionnaires and Tests

How much has the trainees’ knowledge increased as a result of the training? It’s important to measure but does not guarantee the application of this knowledge.

Control Groups

The use of this approach appears to be reasonable only for the simple and short-termed processes (e.g. lead response time, number of solved tickets, etc.).

HR Metrics

The level of employee retention, satisfaction and loyalty may be considered as a result of successful eLearning. But it is always very difficult to seperate this from the other factors such as salary, career opportunities and corporate culture.

What Is ROI of eLearning?

ROI Formula

As it appears from the abbreviation, ROI is a measurable unit that represents an excess of value received over the cost incurred for the program. A successful eLearning program will deliver greater returns than costs.

Costs vs. Benefits

costs and benefits

Investment (or cost)

This component addresses the question "What will it cost me to put eLearning in place?" and includes personnel, eLearning technology and eLearning content.

Return (or benefit)

This component of ROI addresses the question "How will embracing eLearning help me?" and includes eliminated travel and lodging costs, decreased instructor costs, decreased work time spending, personalization, flexibility and minimum disruption.

Example of ROI Calculation

ROI calculation example

This is how we calculated ROI of eLearning project for one of Eduson's clients (a financial organization). You can use this template or create a new one for your company.


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