Annee Bayeux, chief learning strategist at Degreed, explores the new learning metrics that L&D leaders can use to justify learning spend in an uncertain market.
by Annee Bayeux
March 3, 2023
Savvy business leaders know that moments of crisis provide an opportunity to innovate and emerge stronger. Instead of hunkering down and waiting for the storm to pass, the best businesses learn to ride the waves to get ahead of the competition. Innovation thrives during downturns and learning is core to this — as long as the rest of the business understands the role that learning plays. Therein lies the challenge for chief learning officers, with the right internal messaging and reporting, everyone will understand how downturns are actually the best time to invest in upskilling your people.
A renewed focus on business value
Given the current climate, business leaders are hyper-focused on ROI and business value with 44 percent changing their purchasing decisions due to rising costs. This means that learning and development metrics need to evolve beyond vanity metrics that fail to show learning’s true impact on business performance. The impact of any economic uncertainty on organizations are well-documented, with many leaders hunkering down and cutting back on anything they see as unnecessary spending. CLOs need to do everything they can to not be put in that category.
Uncovering the right data
The answer lies in data. If you can find the right metrics to show your senior stakeholders that learning is a clever investment and not just a cost center, then L&D won’t even be a consideration when budget cuts come.
Communicating business impact
It used to be two departments that had to worry when downturns loomed: marketing and L&D. But with the dawn of the Internet and digital channels, marketing evolved to show clearly how it impacted the bottom and top line. Qualified leads, cost per acquisition, customer churn rate and customer lifetime value are just some of the metrics that marketing uses to prove its worth to the wider organization. It’s time for L&D to do the same.
Broadening L&D reporting
Make no mistake, like the marketing teams of the 2000s, L&D teams are now sitting on a potential mountain of data. The tricky part is identifying and consolidating the data you need from all parts of the business. This is where a close partnership with the heads of other business units will prove invaluable as they often have access to data that learning may not always see. This includes sales leads, onboarding time, performance and productivity metrics, customer satisfaction scores and more. Data generated by different business units during their daily work activities can complement other metrics L&D may own such as learning hours or investment in a learning resource.
Increasing ethics more efficiently
Ericsson provides a good example of this in action. When it invested in a new online learning system, the L&D team were able to calculate that course completions rose by 62 percent while the cost of operating the learning technology ecosystem fell by half. Alongside this, business units were directly impacted by a 41 percent increase in ethical practices, with 97 percent of employees completing new anti-corruption training within the first two months of the system launching. This was a month faster than previous campaigns with higher completion rates.
Simultaneously, the L&D team also discovered that the number of workers who were learning five company-critical skills (5G, artificial intelligence + machine learning, collaboration, sales and automation) rose by 14 percent due to the new ecosystem.
Understanding what matters to business heads
To tell the true story of what learning is doing in your business, you need to start using business-aligned metrics. But partnering with department heads has another benefit: You gain their buy-in, and possibly their budget, to do critical upskilling identified within their unit.
Learning helps all teams to achieve more with less in very tactical and strategic ways. It can increase productivity and reduce attrition. Operational efficiencies are desired by business leaders at all times, but especially when conditions are tight. Learning can deliver some of those efficiencies, as long as you’re tracking the right metrics.
At IT staffing firm TEKsystems, aligning learning to what skills and knowledge sales leaders identified as important enabled new sales agent onboarding to be cut by four weeks. This meant they drove revenue faster and moved from training compensation to salaries sooner.
Looking long-term
It’s helpful to communicate the message that learning also prepares your workforce for post-downturn, because all recessions ultimately come to an end. Recovery is inevitable and organizations that have used the time sensibly will be able to springboard to success when the economy stabilizes.
Partnering with other business heads will identify the critical long-term projects that you know will have to happen, downturn or not. You can then pinpoint the skills needed to make these projects a reality, alongside the current skill levels of a department and any potential shortages. Learning plans and talent academies can then be built to bridge the gap between what exists and what the department needs.
For technology investment group Prosus, investing in future-ready skills is crucial to its roadmap. It identified skills in AI that it needed to build in non-technical employees, as well as those seeking new career paths into AI. As a result of this targeted approach toward these two employee groups, it has enabled 101 developers to begin new career paths in machine learning and raised technical literacy for thousands more colleagues. Moreover, through its Privacy Technologist Programme, Prosus has expanded its bench of certified IAPP members (International Association of Privacy Professionals) from 30 to 246 people.
The perfect time to upskill
It’s also worth mentioning that projects can often be delayed when a downturn materializes, which can give employees more capacity. There’s little opportunity cost, therefore, in using this time to develop skills that matter to the business now and in the future. Plus, it can help people feel less vulnerable which pays off when the market improves because employees will remember that during uncertain times, their employer invested in their career development and skills. That builds trust and loyalty.
It also signals confidence, both internally and externally. If you invest in learning during economic uncertainty, it shows that you’re planning for the future. That employees can rely on long-term opportunities at your organization and that your business is planning for growth post-downturn.
Ensuring success post-downturn
The instinct to pause during any kind of uncertainty, economic or otherwise, is completely understandable. Yet, your people remain a critical part of your workforce and they need to spend this time wisely so they are ready to ramp-up when the good times come again. Now is the best time to upskill your people, as waiting until the economy improves will delay the benefits and cause your organization to lag behind.