training and development KPI

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Key performance indicators (KPIs) run the business world. Whether you’re measuring sales, cost, time, or something else, the closer that these KPIs come to impacting the business, the more valuable they are to key stakeholders. This is an important consideration when considering a new learning technology adoption or purchase. If business leaders can see and measure the value through impactful KPIs, the more likely the adoption or initiative will be successful. Having a grasp on meaningful KPIs is also paramount when presenting the business impact of L&D to key executives or stakeholders.

But what exactly are “impactful KPI’s”? Knowing how to effectively communicate training value in terms of KPIs that impact the business are the considerations that separate the L&D professionals who have a seat at the table, and those who don’t. If you are “at the table,” you know what I mean by this. Here are some KPIs that are NOT the most impactful to the business, and don’t hold much value when trying to justify a new L&D investment:

    • Number (or percentage) of completions
    In an e-learning rollout from the last 6 months, 368 employees completed the training.
    • Number (or percentage) of people who attended an ILT event
    Last month we had 75% of employees attend the ILT event on leadership skills.
    • Number of new (or total) courses developed
    Within the past quarter, we developed 4 new training courses to be delivered next fall.

If you’re a key executive, you know that these metrics aren’t the most valuable when you’re trying to get a grasp for ROI or quantifying L&D’s employee/business impact. How do we know the training even worked for those that completed it? The metrics above are better suited as performance metrics for the L&D professional and if they’re doing their job (creating and effectively delivering engaging content, rallying interest for ILT events, and proactively developing new courses). These are all fine and well, and you should keep measuring them from a training perspective. But remember, completion metrics do not prove the training is impacting employees or businesses.

So now that we’ve beaten down the topic of non-impactful KPIs, what ARE impactful KPIs? These are typically specific to your business and industry. To determine the impactful KPIs of your business, we recommend gaining business alignment through meeting with key stakeholders. What would these stakeholders like the training to address and improve upon? Here are some industry-specific and generic examples of KPIs that may be important to your business and good to consider when designing your training:

Healthcare KPIs

Healthcare related organizations typically have many moving pieces. Here is a sample of some KPIs that you might start considering upon meeting with your business leaders:

    • Number of patients in ER
    • Average length of stay
    • Time to healthcare service

When you meet with your business stakeholders, you might find that they’d like to improve Time to healthcare service. Before designing your training, you may discover that the average time to service is 1 hour. From here, you may focus in on delivering content and resources to speed up processes that affect time to service.

Sales KPIs

If you’re a sales organization, most of your KPIs will probably deal with affecting sales numbers. Here are some sales-related KPIs that you may take into consideration:

    • Monthly sales growth
    • Monthly calls/emails per sales rep
    • Sales per rep

Sales is typically an easy KPI to measure, and if your stakeholders identify they’d like to increase the monthly calls per sales rep, you may design your training to help effect this. You may also consider looking at top vs. bottom performers, and identifying the actions top performers take that can be replicated with bottom performers.

SaaS Product KPIs

If your company offers a SaaS product or application, there are some important metrics in which training has the power to affect.

    • Customer retention rate
    • Customer churn rate
    • Viral coefficient

These metrics are focused on how well your team and product serves your customers. Training has the power to increase these metrics through how your employees are interacting with, and serving the end-users. Speaking with your business stakeholders can give you more insight into KPIs your training may help improve.

Call Center Metrics

Call centers are another example of a data-rich industry where training has the potential to positively affect many different KPIs.

    • Active vs. Waiting Calls
    • Cost per Call
    • Dials per Hour

Hopefully you now have a better idea on what types of KPIs might be important to your business. But, if you’re like me, you probably don’t want to assume (we know what that means). So here’s an example of a process on how you might determine those important business KPIs and start measuring your learning’s impact:

Align with Stakeholders

Determine KPI and Performance Improvement Areas

The first step is aligning with stakeholders of your business to determine what KPIs need to be improved through training. Are overall sales or calls per sales representative lacking? Write that down. Is customer service less than ideal? Make note. This will get your motors turning on the types of content you might need to deliver in your next training initiative.

Define the Business Goals

After you have a list of KPIs that need to be affected, the next step may would be putting these KPIs into a measurable goal format. You might be inclined to write down: Increase sales numbers. But, by how much? In what timeframe? These considerations are important to include when writing down the business goal and will help you in determining the timeframe of your training initiative. A correctly identified goal might look like: “Increase customer retention rate by 20% within the next 6 months.”

Build Your Training Around the KPIs

Now that you have KPIs to focus on, you can begin to develop the training initiative along with the quizzes and tests that will support the behaviors you’re intending to affect.

Measure the Results

See if the KPIs you and the stakeholders identified were met through a data collection and reporting tool.

Conclusion

So how do we know how much or if the training is even affecting these KPIs? This is an age-old question and can be difficult to measure without the proper learning analytics strategy in place. But it is possible and it is easy if you know what to implement. If you hope to truly prove your training is affecting these business KPIs, a strategy that can measure your training efforts (LMS analytics, course analytics, etc) and map to business results (Salesforce information, HRIS, etc) needs to be business-critical to you and your stakeholders. We help our clients make these types of impacts everyday through our xAPI experience and our Storepoints Learning Record Store.

Contact Us to Learn More About Impacting Your Business Through xAPI and Learning Analytics

4 Comments

  1. mark

    We measure completions and those other metrics internally, but we are at the point of looking at an LRS so we can start getting the right metrics and speaking more in-line with the business. Agreed that completions and attendance don’t do L&D much justice..

    • Christy Puller

      Hey Mark,

      That is exactly what most of our clients are using xAPI and our LRS for – Correlating learning activities to business outcomes.

  2. ShekarMani

    Hi this more of clarification/Query. The KPI’s are fine how ever when we drill down further:
    The KPI’s are an out come of the combined effort of the department/team (Capacity of the organization).
    You will have a extremely performing and an non performing person, now your capacity gets drilled down to individual Capability.
    Capability is cumulative outcome of multiple skills and their level of competence, which could vary in each skill that needs identification.
    Training address capacity not capability.What kind of metrics will you capture in these levels of Capacity-Capability-Competence.
    If you have different approach in building capacity to achieve KPIs would love to hear from you.
    regards,
    Shekar Mani

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