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
“
The first step is to understand the meaning of employee lifetime value (ELTV). This is a metric that represents the total net value that an employee brings to an organization over the course of their time with the company. It enables 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 know 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 see how workforce education boosts impact throughout every phase of the employee lifecycle.
How to expand ELTV with workforce education
Time
Employee Output
2
1
3
5
4
Enhanced recruiting
1
2
Increased engagement
3
Boost productivity
5
Improved retention
4
Advanced internal career mobility
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.
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 from your workforce education program will likely vary depending on your business goals, but here are some metrics we recommend tracking to measure impact:
Outcome #1: 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%
Outcome #2: Social impact
Making a difference
The social and economic benefits of 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.
57K
The number of learners enrolled in InStride programs, contributing to $832M in student debt avoided.
94%
70%
of workers want their employer to offer benefits that impact their quality of life, such as paying off student loan debt and more flexible work arrangements.
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
Outcome #3: Employer brand
Securing status as an employer of choice
The competition for top talent is exceptionally intense in today’s job market, so being an employer of choice matters more than ever. Offering accessible learning opportunities positions a company as a desirable organization that’s invested in the growth of its employees.
A highly-regarded employer brand has a halo effect that impacts the ROI of your workforce education program in three key ways:
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
• 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 easily 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
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How to read this graph
3
4
Draw in higher-caliber hires, which lowers time-to-productivity
Outcome:
Attract high-quality talent
Quantifiable result:
• Time to productivity
• New hire turnover
Key metrics:
Outcome:
Boost employee engagement
More engaged employees leads to increased productivity and quality of work
Quantifiable result:
• Employee promoter
score
• Employee satisfaction
• Turnover rate
Key metrics:
Outcome:
Increase retention
Engaged employees are less likely to leave an organization
Quantifiable result:
• 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:
Outcome:
Fuel internal talent mobility
Increase supply of skilled employees, lower external costs and grow employee impact over time
Quantifiable result:
• Time-to-fill
• Employee lifetime value
• Internal promotion rate
• # of internally vs
externally filled roles
Key metrics:
ATD. National Center for Education Statistics. Randstad. Aflac. Gallup. LinkedIn. Randstad.
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The ROI of workforce education
A simple framework for measuring the impact of employee education
Introduction
Understanding ELTV
ELTV framework
Additional outcomes
It shouldn’t come as a surprise when executives want answers about the ROI of a workforce education program. This is why it’s critical for HR, L&D and other leaders across the learning and upskilling ecosystem to be able to link employee education initiatives to proven business and social outcomes — both to justify the investment to leadership and make sure that employees are actually benefiting.
Yet, breaking down ROI can be a challenge if you don’t have the right tools.
Here’s an easy-to-follow framework that helps you measure the impact of a workforce education program. Armed with insights into what’s effective and what isn’t, you can determine where to allocate resources for the most impact.
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 impacts brand reputation and perceived quality for employees, job candidates and even customers.
Talent acquisition: Helps attract job-seekers that are looking for an employer that invests in their growth and development.
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 highers with shorter ramp times
Increase engagement by providing learning opportunities
Build critical skills that maximize efficiency and productivity
Minimize turnover through boosted engagement
Upskill and reskill to fill positions from within
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 external recruitment costs and grow employee impact over time
Key metrics:
• Time-to-fill
• Employee lifetime value
• Internal promotion rate
• # of internally vs externally
filled roles
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:
Draw in higher-caliber hires, which lowers time-to-productivity
Key metrics:
• Time to productivity
• New hire turnover
Attracting
high-quality talent
Time
Employee Output
4
5
3
2
1
Non-participating employee
Participating employee
High
Low
5
Improved retention
Minimize turnover through boosted engagement
4
Advanced internal career mobility
Upskill and reskill to fill positions from within
3
Boost productivity
Build critical skills that maximize efficiency and productivity
2
Increased engagement
Increase engagement 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.
Increase retention
+
Engaged employees are less likely to leave an organization
Quantifiable result:
• Cost of turnover
• Retention rate
Key metrics:
Boost employee engagement
+
More engaged employees leads to increased productivity and quality of work
Quantifiable result:
• Employee promoter score
• Employee satisfaction
• Turnover rate
Key metrics:
Attract high-quality talent
+
Draw in higher-caliber hires, which lowers time-to-productivity
Quantifiable result:
• Time to productivity
• New hire turnover
Key metrics:
Fuel internal talent mobility
+
Increase supply of skilled employees, lower external recruitment costs and grow employee impact over time
Quantifiable result:
• Time-to-fill
• Employee lifetime value
• Internal promotion rate
• # of internally vs externally
filled roles
Key metrics:
Close
A simple framework for measuring the impact of employee education
65% of organizations do not measure the business results of their learning investments
1
Outcome:
Fuel internal talent mobility
Outcome:
Increase retention
Outcome:
Boost employee
engagement
Outcome:
Attract high-quality
talent
of employees say a company’s market reputation is “very important” when considering a new job.
5
of recruiting leaders worldwide agreed that employer brand has a significant impact on hiring.
6
of HR, procurement and C-suite leaders say a strong brand leads to stronger engagement and higher productivity.
7
ATD. National Center for Education Statistics. Randstad. Aflac. Gallup. LinkedIn. Randstad.
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