How to calculate eLearning ROI

How to calculate eLearning ROI

For most companies, the value of training has long been clear. New staff need to be educated, not just about tasks that are essential to their role, but also about things like company policy and fun stuff like compliance! From the day a new staff member is onboarded, training can help with everything from integrating them into company culture to protecting you from costly legal complications. Long after those first few boxes have been ticked, training can help your company to reach key goals. That’s how we use training at LearnUpon. The processes we created help us to better understand how our LMS fits important use cases and to ensure all of our work is customer-focused.


Companies that believe in the value of training now have another question to ask: what’s the Return on Investment (ROI) of eLearning when compared to traditional forms? My answer usually begins with two additional questions:

  • What value do you place on training?
  • How would you like training to be delivered?

Because traditional training methods were almost always inefficient, the transition to eLearning helps to cut costs and speed up processes. In the past, training sessions were delivered face-to-face. To organize a single session, a company needed to complete many tasks: book a room, hire and even fly a training instructor to the location, fly in attendees from other offices, print training materials, manually record the results of assessments in a database, often relying on simple but unsecure tools like an Excel sheet. It’s easy to see how traditional training quickly generated sky-high costs. Planning a session meant juggling multiple calendars. Even then, squeezing the relevant people into a room on a given date and time wasn’t always possible.

eLearning eliminates many of these costs. When you invest in the right technology, training is more flexible, and so, more cost-effective. Using a cloud LMS in particular makes it quicker and easier to train staff. If you’re considered investing in eLearning, here are the main benefits you’ll enjoy.

eLearning is more cost-effective

Reducing your reliance on real-world locations and assets allows eLearning to save on many traditional costs. When you switch to online training, expenses for things like hiring onsite facilitators and printing training materials are reduced. Course content is hosted in your cloud based LMS and accessed by learners when and where it’s required. But it can take time for eLearning to deliver ROI. First an investment in the subscription cost of an LMS is required. As soon as the LMS is used to displace traditional training, eLearning will start to generate ROI. Remember to scrutinize the LMS pricing model of every vendor you consider. To avoid worrying about additional costs, watch out for providers who hide nasty implementation fees in the fine print.


Faster training delivery

eLearning allows you to create leaner and more agile processes that benefit both course admins and learners. Online training can be delivered more quickly than traditional methods. When you invest in a cloud LMS, learners can begin to absorb information and develop skills as soon as training content is uploaded. Hosting content online also allows updates to be made quickly in response to changing business needs. Let’s say feedback indicates that additional customer service training is required. When training is delivered offline, you must update, print and distribute training materials, book a meeting room, and confirm staff availability. That’s all just to deliver a simple customer service training session. If you’ve invested in an LMS, you can simply schedule a webinar session instead. The LMS vendor you choose should have a great reputation: an uptime of at least 99.99% and zero down-time for feature releases. That means the LMS will always be available whenever learners need to complete training.


Better trained employees

The efficiency of eLearning creates better trained employees with improved knowledge retention. When training is conducted online, monitoring and reporting on learner progress is much easier. A good LMS makes it simple for course admins to run reports that quickly identify knowledge gaps. You can use your learning management system’s reporting features to address weaknesses by enrolling impacted employees in training modules that target skills gaps. eLearning also allows team members to become more proactive about training. Uploading resources to a central location allows staff to access helpful material when and where it’s needed.


A worked example of eLearning ROI

That’s enough theory for now! Let’s illustrate eLearning ROI by looking at a typical example of how traditional training compares to eLearning. The scenario I explore is indicative only. It’s based on a fictional company located in Chattanooga, Tennessee, USA. The company’s called Farming Solutions and has 100 employees. Farming Solutions specializes in providing products and services for agricultural manufacturing. The company’s CEO has tasked the training coordinator with developing a strategy that addresses the following problems:

1. Traditional classroom based training, with all sessions delivered by external facilitators, is expensive. Employees who miss a session find it difficult to arrange an alternative.
2. It’s difficult to assess how effective training is and what the outcomes are. Compliance regulations make it important to solve this problem.
3. Scheduling a single training session can take weeks of planning. This inflexibility makes it difficult to respond to changing business needs, like addressing customer feedback and resolving skills gaps.


Current training methods

1. Quarterly compliance training for all employees. A large conference room is hired in a local hotel to cater for 100 staff members over two days.
2. Two training facilitators are hired to deliver compliance training. The total cost includes the trainer’s time for two days, travel and accommodation.
3. Other costs include lunch for all participants and printing training materials.
4. Customer feedback indicates that the company’s sales and support teams don’t fully understanding customer needs. The gap threatens to damage the quality of customer onboarding and customer retention. The CEO has ordered regular product training to be delivered to sales, marketing and customer support teams. That training is currently only delivered by instructors once a quarter.


How would this scenario be adapted for eLearning?

1. Quarterly training sessions for all employees are delivered without external facilitators. Employees read and watch recently updated documents and videos on the company’s LMS. Employees submit online assessments that track their understanding of external compliance regulations. As the company already uses WebEx for sales calls, some training modules are delivered in webinar format. Using LearnUpon’s turnkey WebEx integration allows all 100 employees who attend the WebEx webinar to have their attendance automatically recorded in the LMS for use in compliance reports.
2. Costs including venue hire, printing and catering, are either eliminated completely or greatly reduced.
3. Training to address issues identified in customer feedback is more dynamic. Content about new products, technologies and processes is quickly uploaded to the company’s LMS. Using a fully responsive LMS like LearnUpon allows staff members to access content on any device – leaving less room for excuses about non-completion of training.



So what is the ROI of eLearning? The actual figure will vary between companies. It will be informed by how important training employees, customers and partners is to your organization. But the benefits of eLearning are clear. The example we explored shows how the typical requirements of traditional classroom based learning make it inefficient. eLearning can be delivered more quickly, cost effectively, and makes it easier to ensure your employees’ skills and domain knowledge are up-to-date. But investing in eLearning doesn’t mean you have to abandon the classroom entirely. In an ideal scenario, classroom based learning will be blended with online training to ensure your company has the exact knowledge and skills it needs to succeed. And at the end of the day, that’s the best ROI a company can have!