At Gravity Learning, we've developed a rigorous method to quantify the real return on investment (ROI) from our learning programs. People have often said that quantifying ROI from people skills training isn’t really possible. We’re here to tell you that’s not true.

In this article, we break down our approach.

Methodology

Approximately 30 days following a program or workshop, we conduct follow-ups to determine if participants are applying new behaviors and if the application is making a visible impact on the work. Impacts must be observable. “It feels like it’s working” isn’t going to be quantifiable.

After participants confirm behavior change and impact, we delve into specifics such as time savings or improvements in key competencies linked to success in their roles.

A Conservative Approach

We understand that leaders might be dubious about quantifying the effects of learning, so we adopt a super conservative stance in our evaluations. For example, if someone doesn’t reply to our inquiries, we count them as having received zero value from the training. We know that’s probably not the case, but don’t make any assumptions.

We also don’t take estimates at face value. Instead, we correct for confidence and over-estimation. If a participant estimates a certain amount of time saved but is only 20% positive their estimation is correct, we only count 20% of their estimate.

We also remove statistical outliers and use standard deviation methodologies to ensure accuracy and avoid inflated reporting. If the average time saved by participants is 4 minutes a day and one participant says they are saving a full hour, that might be true (go Gravity!), but we totally remove that data just to be safe.

Calculating ROI

Don’t worry, we’re not making up some goofy “ROI for Learning” formula. Our ROI calculations are standard formulas. ROI is “gross return minus the cost, divided by the cost, then multiplied by 100”. We account for all associated costs we can think of, including development time, meetings, travel, facilities, and the significant expense of participants' time in workshops, which is usually more costly than any fees associated with delivery.

Validating Returns

When analyzing returns, we require concrete examples to back up any reported savings. This evidence validates returns and provides stories and examples so leadership can visualize how the returns are realized.

As if that weren’t enough, Gravity also collects data from participants’ immediate supervisors and leadership. When supervisors confirm that they see an improvement in behaviors it goes a long way towards not only validating results but also increasing senior leaders’ confidence that the results are concrete.

What Gets Quantified?

We all know that two employees with the same seniority and background can have widely different value on the job. How does Gravity quantify that value?

Sometimes our partner orgs know the specific value of improvements in behavior. Otherwise, we rely on measuring time savings or quantifying value of improvements in key competencies using a standard statistical mechanism called Utility Measurements.

Utility Measurements work by quantifying the variables that are responsible for success. For example, if feedback skills—deemed to account for 4% of a manager’s success—increase in effectiveness, this improvement can be quantified in relation to the expected value of the employee’s salary. A manager who makes $100K a year, who gets 20% better at feedback, gains $800 in received value for their org.

The Real Deal – How ROI Helps Learning Leaders

A common Learning and Development challenge is dealing with a data-focused senior leadership team who sees learning as a “nice to have”.

Our methodologies for gauging improvement provide leaders with credible numeric proof that learning is as valuable as we have always believed. Armed with data-driven evidence, leaders come to trust Learning and Development to drive important changes and become an indispensable part of achieving organizational-level goals.

For a deeper dive into the specifics of our methodologies or to discuss how we can help your organization, why not get in touch? We love this stuff.