Traditionally, the effectiveness of learning and development programmes hasn’t been measured in purely financial terms. But a survey conducted by the CIPD has found that almost half (48%) of employers now measure return on investment (ROI) for development initiatives, up considerably from the 26% recorded this time last year.  What impact will this have on learning and development within business and could this lead to HR being more influential at the main board or partnership table?

The historic lack of clear financial measurement of development initiatives has always been a challenge HR. After all, how can the management of people, the most important factor in any business, not be measured in the same way that functions such as marketing and accounting are? Learning and development schemes aren’t just utilised for improving skill sets of employees; they can also be used as a valuable attraction and retention tool that can help to improve your employer brand and keep staff motivated.

Encouragingly, the 22% rise in the number of employers who are measuring ROI year-on-year is a   significant one. This rise is large enough to reflect a considerable change in attitudes of decision makers who have obviously begun to realise the true value of learning and development programmes. Organisations may finally be able to align the commercial agenda with the people agenda which will only benefit both businesses themselves and their employees. This move could also indicate an increase in the importance of the entire HR discipline. Many professionals have been crying out for human resources to get a seat on the main board and the shift towards financial measurement and analytics could indicate a move to the heart of commercial decision making.

We could be entering the same period that marketing did at least 20 years ago, when the discipline went from being measured in creative terms, to being analysed in a much more quantitative sense. HR could be going the same way and many organisations will need to develop the necessary skills in their workforces. Decision makers should also be looking to bring in individuals from outside of HR with experience of analysing data and with the ability to communicate this to senior decision makers. This will not only benefit them by having the appropriate skill sets on board, but also by improving diversity in these teams.

Hopefully, this will prove to be a sustainable trend and increasing numbers of companies will begin to measure return of investment on their learning programmes. We believe this will not only help organisations in financial terms but will also enable them to differentiate between initiatives that are value-added and those that provide no tangible business benefit. This will then support both attraction and retention meaning decision makers will be able to build more effective workforces than ever before.

Do you agree that the rise in businesses measuring ROI on L&D is a good thing?

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