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Assessing the impact of corporate employee training on business results is a complex task, but it must be addressed, say Russian experts. Without it, training and development departments cannot justify their importance to the business and secure the allocation of resources. According to the "Russian Online Education Market Study" conducted by Netology and TalentTech, only 11% of companies in Russia evaluate the connection between training and business metrics, such as revenue or task completion. This highlights the need for a more proactive approach to measuring the effectiveness of educational programs in organizations. The problem of aligning learning and development (L&D) functions with business metrics is not limited to our country. A report by the British company MindTools, titled "Turning Pressure into Opportunity," published in March 2023, indicates that the situation in this area abroad also leaves much to be desired. L&D specialists lack the necessary skills to effectively interact with business metrics, indicating a need for professional development. Until L&D employees establish a connection with key business metrics, their work will not be taken seriously by senior managers. The MindTools report presents key findings that highlight the need to improve these relationships to achieve organizational success.
What are the findings based on?
The MindTools report is based on the results of several surveys. These surveys cover various aspects of professional development and management. Data analysis reveals key trends and training needs. The survey results help organizations understand which skills and knowledge are most in demand in today's labor market. This report is a valuable resource for professionals looking to improve their skills and adapt to changes in the professional environment.
- A survey of 772 L&D leaders (conducted by the company from December 2020 to December 2021);
- A survey of 912 L&D leaders from December 2021 to December 2022;
- Data from a survey of 557 business leaders, conducted in partnership with the YouGov service.
What the research results showed
Business leaders and internal training departments face difficulties in collaborating due to different goals, as confirmed by the Mind Tools report. The study found that in 2022, less than 50% of surveyed learning and development (L&D) leaders were aware of strategic business goals, and even fewer took these goals into account in their work. Effective collaboration between these functions is critical to achieving overall company success and improving competitiveness. Establishing a clear connection between strategic business objectives and training programs can significantly improve results in both employee development and the achievement of business goals.
In the report There are also other warning signs that require attention.
- Only 35% of surveyed L&D professionals regularly review how training programs align with company objectives.
- Only 27% of respondents synchronized corporate training metrics and KPIs with their organization's business leadership.
- Nearly one-third of learning function leaders do not have a strategy for their department. Furthermore, in 2022, the majority of respondents were concerned about the lack of investment in a strategy that would meet the requirements of the future.
- Another 33% of respondents were also seriously concerned about excessive workload and a lack of resources.
According to MindTools experts, all of these factors have had significant consequences.
Based on a survey of business leaders, the authors of the report identified the priority goals of companies for 2022. These goals include:
- reducing operating costs (47%);
- improving customer satisfaction (38%);
- business transformation and growth (37%);
- improving productivity (34%);
- innovation development (26%).
The survey asked respondents what role they attribute to L&D departments in achieving business goals and how highly they value this contribution. The results showed that as the importance of goals set by management increases, the perception of the contribution of learning and development departments to their achievement decreases. This underscores the importance of raising awareness of the role of L&D in the strategic development of companies and the need to integrate their efforts into overall business strategy.
The goals that most concern business leaders are often perceived as the least important for the learning and development (L&D) department, according to the authors of the report. This contradiction highlights the need for closer alignment between strategic business goals and employee learning initiatives. For a company to thrive, it is crucial that L&D considers leaders' priorities and adapts its programs to improve performance and competitiveness. Aligning business and learning goals helps create a more productive work environment and improve results.
The report's authors note that in some cases, the respondents' rationale is understandable. For example, the goal of reducing operating costs is often a short-term priority. At the same time, learning and development (L&D) departments should focus on long-term priorities, such as preparing employees for future changes in the labor market. It is essential for companies to balance current needs with strategic talent development to achieve sustainable success.
Despite the fact that L&D goals, such as fostering innovation and business transformation, are well aligned with the strategic objectives of organizations, many company leaders fail to recognize their importance. They do not see L&D as an important contribution, which calls into question the role of these functions in successful business development. This highlights the need to rethink approaches to employee training and development to highlight their impact on a company's growth and competitiveness.
Lack of trust from business leaders in The lack of understanding of learning and development (L&D) functions reflects a misperception of their importance within the company. This perception can have long-term negative consequences: organizations begin to experience internal discord, executives feel a lack of support, and L&D teams are left with limited resources. This underscores the need to rethink the role of L&D in business and elevate its status as a key element for a company's successful development.
The survey revealed the main challenges facing business leaders in the field of learning and development (L&D). The main complaint is that L&D teams are focused on short-term goals, ignoring long-term prospects. 23% of respondents say this significantly limits their companies, and 26% believe that this factor significantly hinders their development. Furthermore, a significant issue is the lack of strategic influence of L&D on business transformation. 18% of respondents identified this as a serious shortcoming, and 27% as a significant one. These findings highlight the need to rethink L&D approaches to ensure more effective alignment with business goals and its long-term strategies.
Research showed that business leaders who are most skeptical about the strategic impact of learning departments emphasize innovation, speed, and agility. This implies that they believe that learning and development (L&D) does not play a key role in these areas. The report's authors note that it appears that business leaders expect L&D teams to take action but do not trust them to deliver.
Responsibility for employee training cannot rest solely with education departments or corporate universities. Research shows that business leaders often struggle to formulate clear and understandable goals, making it difficult to communicate them to employees. Effective training requires the active participation of the entire leadership team and a sound communication strategy. It is important that goals are not only clear but also achievable, which will create motivation and increase employee engagement in the learning process.
L&D functions face significant challenges. One key challenge is the need for business acumen, which allows training teams to more effectively interact with business managers. However, as practice shows, this quality has proven to be in short supply. According to MindTools research, in 2020, 45% of L&D leaders claimed to have the necessary business acumen. By 2023, this figure had dropped to 29%. This highlights the need for increased professional skills and improved communication between learning teams and the business to achieve more effective results.
Business acumen is essential for L&D teams. They need to understand how business leaders set priorities, what factors influence their decisions, and how learning fits into the overall company strategy. Understanding these elements will help L&D teams more effectively design and implement learning programs that align with business goals and the organization's needs.
According to MindTools, businesses expect the learning and development (L&D) function to foster a culture of continuous learning. This culture enables employees to continually develop, which in turn contributes to the overall growth of the company. To successfully create such a culture, a clear understanding of its characteristics, as well as methods for assessing its effectiveness, is necessary. The authors of the report emphasize that benchmarking, which involves the use of clear standards and metrics for comparing the performance of learning departments, is an important tool for this. However, it's important to keep in mind that goals and benchmarks can change over time, and therefore, learning approaches must also adapt. Therefore, regular benchmarking is not just useful, but essential for maintaining the relevance and effectiveness of educational programs.
However, another problem arises: learning and development (L&D) functions lack the necessary skills and resources to conduct such research. In 2022, only 19% of learning teams were able to obtain the necessary analytics without relying on external experts. This underscores the importance of developing internal analytics competencies to improve learning effectiveness and support organizations' strategic goals. Strengthening analytical skills in L&D teams can lead to a deeper understanding of employee needs and optimized learning programs. Mind Tools analysts conducted a study comparing L&D leaders' perceptions of the necessary skills within their teams. The results showed that assessing business impact is a significant challenge: only 20% of respondents can assess their contribution, while 69% noted a serious lack of the necessary skills to do so. Furthermore, only 23% of L&D teams are capable of conducting research independently, and 48% lack the necessary skills to perform this task. Only 25% of teams possess analytics and data management skills, highlighting the need to develop these key competencies to improve operational effectiveness and business impact.
The second challenge is that not all learning departments have access to the necessary data. Less than one-third of surveyed professionals consider business metrics in their work. This creates gaps in analysis and decision-making, which can ultimately negatively impact learning effectiveness and employee development.
The report's authors emphasize that learning and development (L&D) departments are insufficiently communicating their business impact, while their reporting on learning activities is redundant. From a senior management perspective, this data is perceived as insignificant operational metrics. A change in the approach to learning and development (L&D) reporting is needed to focus on the real impact on business metrics and the company's strategic goals.
How to solve the problem
The solutions proposed by MindTools may seem obvious, but their emphasis on them highlights their lack of practical application. First, the learning and development (L&D) function should focus more often on business metrics. Second, it is important to evaluate the impact of training on performance and share the results with business leaders, even if they seem insignificant. Third, it is necessary to regularly explain to management how training contributes to the achievement of the company's goals. These actions will help increase the importance of L&D in the organization and improve overall business results.
For effective communication with the business, it is necessary to fill certain gaps in the work, according to MindTools experts. It is important to determine what data needs to be provided to the business and what current issues exist regarding learning and development (L&D). It's also important to identify those within and outside the training team who can effectively analyze this data. By engaging in constructive dialogue with business leaders, training departments can move closer to becoming a fully-fledged function with a clear mission and tangible goals, which in turn will increase their importance and impact on the organization.
Read also:
- How to speak the same language with your training customer
- How businesses can measure training effectiveness: expert opinions
- How to measure the quality of corporate training: 4 illustrative cases
- Experts assess the quality of corporate training in Russia's largest companies