Building a Business Case for Learning

Building a Business Case for Learning

Posted on June 29th, 2023 in E-Learning.

I recently asked an online forum of learning & development professionals via LinkedIn: What is stopping us from supporting many employees or others with on-going learning?

With 660 votes cast, the consensus was:

  • Lack of time for learning: 49%
  • Cost – Simply costs too much: 20%
  • Wrong/bad learning provided: 17%
  • People do not want to learn: 14%

I was glad to see ‘people do not want to learn’ at the bottom, but that is maybe a subject for another day.

For now, I wanted to pick up on the outright winner, or loser, depending upon how you look at it. Time. I also think we can combine Time with Cost, amounting to 69% of the vote between them, as both ultimately come down to perceived value. After all, an organisation would find both the time and money for learning if they believed they would see a positive return on investment (ROI).

Now, people who work in the learning industry usually have a clear sight of the benefits their interventions provide but ‘senior management just don’t get!’ is an oft heard cry.

Learning & development often feels like the poor cousin. It is seen as a cost centre and the first to be cut in difficult times. It can be seen as a ‘nice to have’ not a core necessity.

You and I know that is not the case, dear L&D friend. But it is not enough for you and I to just commiserate with each other within our L&D echo-chamber. Moaning about senior management can be cathartic in the short-term, but longer term we must carry the fight to them, and we have to do it in terms they can understand.

So, herewith my 101 to building your L&D business case…

Investing time and money in learning and development for employees is just that, an investment. And any business investment comes down to three drivers:

  • Reduce Cost
  • Reduce Risk
  • Increase Revenue.

Those drivers hold true for any investment scenario. Learner Bubble, though, provide an extensive catalogue of affordable online learning with feature rich LMS support, if you need it. You could call it your L&D starter kit, if you like, from which you can build out your long-term strategy.

Enough of the advert – but hopefully it gives you context for the following examples from real clients. 

Reduce Cost 

This does not mean simply cutting your own costs, though if we can show efficiencies of our own whilst improving effectiveness, so much the better. Instead, look for the hidden costs elsewhere in the business and bring them to light. Senior management may baulk when you ask for money that can be a figure in the thousands or even tens of thousands, but what they often don’t see are the multitude of tens and even hundreds or thousands that are still learning but hidden in other department budgets, or not even recognised at all.

For example, with Health & Safety training being delegated to line managers, a now Leaner Bubble client uncovered people being placed on any number of random external courses or ‘trained’ in-house by the managers themselves. That alone added up to approximately 2.3 times the cost of our entire course catalogue and LMS provision for them. That is a 230% ROI based on one course alone. Any other of our learning used after that was in effect free!

Reduce Risk 

This does not only apply to Compliance and Health & Safety learning, though it is often the focus. In the example I quote above, as well as reducing the cost of their Health & Safety training, the organisation also now has a centralised, auditable record of certified training completion that they simply didn’t have before. Should the worst happen, they have the assurance that relevant data and records are all there to be called upon.

This was critical recently for another client. A former employee who had a fall in the office tried to sue using a ‘no-win, no-fee’ solicitor. The employee had noticed, earlier in the morning, that there was leakage from the fridge in the kitchen area. Over time, it had got worse, and they had slipped and fallen that afternoon. Fortunately, records proved that they had taken our ‘Slips and Trips’ online course a few months earlier, which made it clear that it was everyone’s responsibility to report any such hazards as soon as they notice them. Of course, the employee had failed to do so. Case closed.

Increase Revenue 

Of course, learning is not just about covering yourself in the case of any incidents – at least it shouldn’t be. Genuinely we want to avoid personal injuries. There is also a financial upside. The flipside of reducing risk is improved performance by reducing accidents and consequent downtime. And improved performance means increased revenue.

It is also a metric, a Key Performance Indicator (KPI), that can be measured. There will be a health & safety incident log somewhere – if there isn’t, there should be! It is an easy enough thing to measure reduced number of incidents after a learning intervention. But try translating that into monetary value. How much productivity is lost per incident? If we reduce incidents by, say, 50% what does that mean financially? That gets the Financial Director’s attention!

Okay, but what about so-called soft skills? How do we show an ROI for that?

Keeping it simple, the first part of the answer to that is to be clear as to what we are looking to improve – What is the learning objective? What are we looking to achieve? Big red-cross ‘uh-oh’ if your answer is something that basically boils down to ‘being better at their job.’ The answer should align with one or more main business objective or KPI. That’s because the second part of the answer is that we are going to measure our learning ROI against that KPI.

For example, another client uses our learning in their customer call centre and makes much use of our Business Skills courses. They take on a lot of seasonal staff, going from 40-50 normally to 100+ at peak times.

The first thing they wanted to do was reduce cost of onboarding – that was the reduce cost argument and our solution paid for itself on that alone. But the real gold is in the improved customer service they deliver, which directly corresponds to their client retention KPI. I know they expect to show up to a 5% or more improvement in that metric but declared a modest target of 3% in their business case submission. But that alone translates into approximately £300k to £350k straight to their bottom line – that’s just a silly ROI in the thousand percentage points range!

So, it can be easy enough to demonstrate a true return on investment for your learning activities. It just needs a bit of different thinking, maybe.

But before I leave you, here are a few Do’s and Don’ts to focus your mind…

Do:

  • Talk about monetary value. Most businesses are in it to make or save money!
  • Use as many, measurable statistics as you can.
  • Use terms like Return on Investment (ROI) and business Key Performance Indicators (KPI).
  • Make sure you understand such terms and can back them up with those statistics!

Don’t:

  • Talk about the number of completions and passes.
  • Talk about the nice comments people have made about the learning.
  • Talk about how it will make everything so much easier for you – they won’t care!

Drop me a line if you’d like to know more…I am also happy to chat. Even more so to work through your business case with you.

Ian Hilder – Business Development Manager, Learner Bubble

Email: Ian.hilder@trainerbubble.com