65%
65% of organizations do not measure the business results of their learning investments
“Lots of companies spend millions on tuition assistance programs, but if you ask them how many people graduated, what schools they went to or if their people have actually progressed, they have no idea. They are basically administering the program with no measurable return on that investment.”
Chief Operating Officer at InStride
“
Employee lifetime value (ELTV) is an important metric that represents the total net value that an employee brings to an organization. It enables L&D leaders to justify investments and can be applied to workforce education as a way to measure long-term impact across the entire employee lifecycle.
To calculate ELTV, you first have to understand the core business outcomes of workforce education and how to quantify them:
How workforce education maximizes employee lifetime value
Take a look at this graph to understand how workforce education generates business impact throughout the employee lifecycle.
A look at expanding ELTV with workforce education
Time
0
2
4
6
8
10
12
-2
-4
-6
Employee Output
2
1
3
5
4
Enhanced recruiting
1
2
Increased engagement
3
Upskilling and reskilling
5
Higher retention
4
Leadership development
When first hired, an employee’s output is negative (they are not yet contributing to the organization, but are still consuming resources). During onboarding, the employee moves toward becoming a “fully contributing” member of the team and their output increases.
Over the lifecycle, productivity continues to increase until, eventually, it plateaus. Once the employee decides to leave the company, productivity typically begins to decrease, and could even dip back into the negatives. By a worker’s last day, productivity is at zero.
From your organization’s perspective, the aim is to make the gray area as tall and as wide as possible, which is better achieved by employees who engage in workforce education as indicated by the red line.
Close
Non-participating employee
Participating employee
Additional outcomes that influence the ROI of workforce education
Removing barriers to education
Lack of access to quality education for underrepresented communities is a significant cause of workforce inequality. Leveraging education as a catalyst for equality helps to remove barriers and level the playing field, ultimately creating a more diverse, inclusive workforce.
The way you quantify DEI results may vary depending on your business goals, but here are some metrics we recommend tracking to measure impact:
Diversity, equity and inclusion
Black and most other minority students are less likely to graduate with a degree than white students.
54%
Asian Americans
White Americans
Hispanic Americans
Black Americans
35%
15%
21%
Ready to take action on workplace DEI?
Access key objectives, industry benchmarks and statistics to guide your DEI strategy
Get the template
Social impact
Making a difference
The social and economic benefits of higher education are well-documented and far-reaching. These include higher lifetime earnings, increased social mobility and stronger health outcomes. Workforce education also reduces student debt and allows employees to share the transformative power of education with their families for multi-generational impact.
52K
Employees enrolled in InStride programs, contributing to $570M in student debt avoided.
94%
70%
Of employees want their employers to ensure the benefits offered have an impact on their quality of life.
Of Americans believe it’s either “somewhat” or “very important” for companies to make the world a better place.
How to measure impact:
• Employee debt reduction
• Lifetime earning potential
Brand
Cementing status as an employer and consumer brand of choice
Investment in employee education delivers a return by positively increasing brand equity through improved awareness externally and internally, brand loyalty, brand associations and perceived quality.
A strong company brand has a halo effect that impacts the ROI of your workforce education program in three key ways:
46%
Of HR, procurement and C-suite leaders say a strong brand leads to stronger engagement and higher productivity.
72%
Of recruiting leaders worldwide agreed that employer brand has a significant impact on hiring.
36%
Of employees say a company’s market reputation is “very important” when considering a new job.
How you choose to quantify brand impact will vary greatly based on your business objectives, but here are some metrics we suggest:
• Employee Net Promoter Score (eNPS)
• Brand value rankings
• Brand equity rankings
Now that you understand the factors that can impact the ROI of your workforce education program, it’s time to take the next step. With our ROI calculator, you can determine your industry’s unique ROI and receive a custom in-depth analysis.
So go ahead and see for yourself, no number-crunching necessary.
Calculate your custom ROI
Calculate my ROI
1
How to read this graph
3
4
5
6
7
Stronger highers lead to a shorter recruiting cycle and lower time-to-productivity
Attracting high-quality talent
Quantifiable results:
• Time to productivity
• Length of recruiting cycle
Key metrics:
Boost employee engagement
More engaged employees leads to increased productivity and quality of work
Quantifiable results:
• Employee promoter score
• Employee satisfaction
• Turnover rate
Key metrics:
Higher retention
Engaged employees are less likely to leave an organization
Quantifiable results:
• Cost of turnover
• Retention rate
Key metrics:
Address skills gaps
In-demand skills are outpacing the supply. Build those skills internally versus trying to hire for them.
Quantifiable results:
• # of internally vs
externally filled roles
Key metrics:
Develop leadership pipeline and promote internal mobility
Increase supply of skilled employees, lower recruitment costs and expand impact over time
Quantifiable results:
• Recruiting costs
• Employee output over duration
of employee lifecycle
Key metrics:
ATD. National Center for Education Statistics. Randstad. Aflac. Gallup. LinkedIn. Randstad.
1
2
3
4
5
6
7
3
The ROI of workforce education
A simple framework:
How to make an impact by investing in your people’s education
Introduction
Understanding ELTV
ELTV framework
Additional outcomes
It shouldn’t come as a surprise when executives, who fund learning and development (L&D), want answers about the return on investment (ROI) of a workforce education program. This is why it’s critical for L&D leaders to be able to link employee education initiatives to proven business and social outcomes — both to be able to justify the investment to leadership and make sure that employees are actually benefiting.
Yet, breaking down ROI can be a challenge.
Here’s an easy-to-follow framework for understanding the impact of a workforce education program and gaining visibility into the right metrics to track.
Is workforce education worth the investment?
Workforce education delivers impact even beyond employee lifetime value. Let's take a look at a few additional outcomes that can impact the return you see from your investment.
Revenue: Positively increases brand reputation and the bottom line through improved brand awareness, associations and perceived quality for employees, job candidates and even customers.
Talent acquisition: Enhances employer brand for attracting top talent with education and growth opportunities.
Retention: Improves employee engagement and loyalty, as it reflects how a company cares about and is investing in their people.
36%
Of recruiting leaders worldwide agreed that employer brand has a significant impact on hiring.
6
72%
46%
Of employees say a company’s market reputation is “very important” when considering a new job.
5
Of HR, procurement and C-suite leaders say a strong brand leads to stronger engagement and higher productivity.
7
• Diverse representation across the organization
• Diversity of talent pipeline
• Workforce education program
participation by diverse groups
Calculate your ROI
+
+
+
+
+
— Jonathan Lau
High
Low
Attract stronger hires with shorter ramp times
Engage employees by providing learning opportunities
Build critical skills to boost productivity and prepare for future roles
Minimize turnover through boosted engagement
Encourage internal career mobility
Quantifiable results:
In-demand skills are outpacing the supply. Build those skills internally versus trying to hire for them.
Key metrics:
• # of internally vs externally
filled roles
Address skills gaps
Quantifiable results:
Increase supply of skilled employees, lower recruitment costs and expand impact over time
Key metrics:
• Recruiting costs
• Employee output over duration
of employee lifecycle
Develop leadership pipeline and promote internal mobility
Quantifiable results:
Engaged employees are less likely to leave an organization
Key metrics:
• Cost of turnover
• Retention rate
Higher retention
Quantifiable results:
More engaged employees leads to increased productivity and quality of work
Key metrics:
• Employee promoter score
• Employee satisfaction
• Turnover rate
Boost employee
engagement
Quantifiable results:
Stronger highers lead to a shorter recruiting cycle and lower time-to-productivity
Key metrics:
• Time to productivity
• Length of recruiting cycle
Attracting
high-quality talent
Time
Employee Output
4
5
3
2
1
Non-participating employee
Participating employee
High
Low
5
Higher retention
Minimize turnover through boosted engagement
4
Leadership development
Encourage internal career mobility
3
Upskilling and reskilling
Build critical skills to boost productivity and prepare for future roles
2
Increased engagement
Engage employees by providing learning opportunities
1
Enhanced recruiting
Attract stronger hires with shorter ramp times
How to read this graph
Close
When first hired, an employee’s output is negative (they are not yet contributing to the organization, but are still consuming resources). During onboarding, the employee moves toward becoming a “fully contributing” member of the team and their output increases.
Over the lifecycle, productivity continues to increase until, eventually, it plateaus. Once the employee decides to leave the company, productivity typically begins to decrease, and could even dip back into the negatives. By a worker’s last day, productivity is at zero.
From your organization’s perspective, the aim is to make the gray area as tall and as wide as possible, which is better achieved by employees who engage in workforce education as indicated by the red line.