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Demonstrating Positive Elearning ROI

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Demonstrating Positive Elearning ROI 6 TACTICS FOR SUCCESS | By Savanah Barry lynda.com www.lynda.com/industries | enterprisesolutions@lynda.com


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How can you and your organization demonstrate positive elearning return on investment (ROI)? Find out in this guide, which describes six key strategies. Identify 2 | Define Establish Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com Understand Consider Measure


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Table of Contents 03 Why elearning? 14 Tactic No. 5: Consider 05 Tactic No. 1: Identify 22 Tactic No. 6: Measure 07 Tactic No. 2: Define 26 Achieving Success 09 Tactic No. 3: Establish 27 Authors 12 Tactic No. 4: Understand 28 About lynda.com 3 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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Why Elearning? Elearning revolutionized how individuals, teams, and entire organizations build skills and knowledge. Measuring the effectiveness of elearning is critical to confirming it delivers tangible benefits. Inability to justify value and success erodes stakeholder buy-in and discourages project champions. 4 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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Identify At its core, elearning is about solving problems. But it’s not enough to see problems only from the learner or manager perspective. You also need to understand the business case for elearning. 5 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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TACTIC NO. 1 Identify training needs Identify training needs in ways that stakeholders will understand by mapping them to the needs of the business. To get started with an elearning initiative ask, “What are we trying to shift? Do we need a training strategy to move the business forward? Do we need to adjust operations to streamline day-to-day activities?” example: The sales team at a manufacturing company doesn’t know how to effectively use a new cloud-based application. Impacts of this include lack of data centralization, a decrease in team collaboration, and an increase in an already present skills gap. Productivity is down 15 percent. Employee morale and retention is a big problem. The need is evident. The company needs to invest in providing the sales group with training opportunities that get all team members up to speed. 6 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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Define It’s important to define the elearning goals for your organization. It’s even more important to define and set the right goals. 7 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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TACTIC NO. 2 GOALS MIGHT INCLUDE: Define goals 75% reduction With your needs in mind, set goals in collaboration with key stakeholders. Discuss what a successful elearning program would look like. example: An organization seeks to increase employee productivity so it deploys a new software application. Currently, each employee spends an average of two hours per week contacting IT for help or searching online for assistance getting unstuck. IT is swamped with requests, leaving inadequate time to work out bugs following the software launch. 8 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com in software-related IT help requests 100% of employees trained on the new software in 3 months Ongoing training opportunities for power users


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Establish Success metrics should support training needs and confirm that the goals you set are met. Align your metrics with your goals. Good metrics help benchmark success, and discussing metrics with stakeholders provides clear understanding of the data you need to collect. 9 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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TACTIC NO. 3 Establish your success metrics The Kirkpatrick Model, based on four levels of learning evaluation, shows how to measure the effectiveness of an elearning program. example: If the goal is to get 100 percent of a sales team trained on new software, then success metrics should measure knowledge building. They also should evaluate the result of that learning, or the business impacts. Your reporting might include: • Number of training registrants (measures reaction to learning opportunities) • Number of IT tickets created before and after learning took place (measures behavior change) • Hours spent on training per employee 10 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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Metrics To Measure Success EVALUATION LEVEL ONE — TWO — THREE — FOUR — Reaction to the Learning Knowledge Behavior Change Learning Results & Impact — — — — Do the course participants like it? What knowledge, skills, attitudes, confi dences, or commitments were acquired? Do participants use their newly acquired skills on the job? Has the course helped improve business results? Training Managers Supervisors Managers Executives & CEOs EVALUATORS 11 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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Understand To fully understand the benefits of elearning, analyze the costs. This includes immediate and ongoing administrative and subscription costs. 12 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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TACTIC NO. 5 Understand your investments personnel costs These costs cover internal employee and external contractor wages. Also factored into the equation are project direction, development, management, and administrative expenses. 13 | platform costs These costs cover the monthly or annual elearning provider subscription. Price varies depending on the solution and contract terms. Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com hiDDen costs These costs are associated with transitioning to a new learning program, as well as personnel disruptions, resource reallocations, existing project deferrals, and team realignments.


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Consider Consider the benefits. Elearning offers a wide range of benefits. They may not all apply to your organization, but it’s likely that a significant number will. 14 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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TACTIC NO. 6 Consider the benefits Some benefits can be quantified. These include training cost reductions, productivity changes, time, and quality. All are examples of hard data. Other benefits are more difficult to quantify–but are equally important–including customer service changes, morale, creativity boosts, talent development improvements, and organizational culture shifts. In addition to these, discuss potential benefits specific to your organization. 15 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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Benefits: Additional Discussion reDUction of traininG costs Producing learning content or sending employees to training offsite takes time and costs money. But elearning happens online, reducing inefficiencies and expenses. ROI goes up when a course costs nothing to develop and is easily accessed. reDUction of time spent traininG In 2013, the average employee spent 31.5 hours in training, with 55 percent of that occurring in a classroom setting, according to the 2014 Association for Talent Development (ATD) State of the Industry report. But elearning lets individuals learn at their own pace at times that work best for them. A Brandon Hall Group study reported that elearning requires from 40 to 60 percent less employee time than when the same material is delivered in a traditional classroom setting. You can calculate the reduction in training time against each employee’s salary to realize the savings. improvement in traininG sUccess Classroom-based instruction is frequently “one-size-fits-all.” But instructor-led training supplemented with elearning has the highest success rate, because it lets in-person training sessions be focused and personalized to audience needs, according to Learning Solutions Magazine. Trainees can consume elearning training outside of the classroom setting and later come to in-person sessions equipped with knowledge for meaningful discussions. 16 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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improvement in employee onBoarDinG Organizations lost nearly a quarter of all new employees within a year, according to the 2012 Allied Workforce Mobility Survey: Onboarding and Retention. Major contributing factors were underperforming onboarding programs and lack of training. The study indicated that the cost of not training new employees properly is steep. Filling one position costs on average $10,731 not including relocation costs, which alone can reach more than $20,000. But elearning allows an organization to streamline onboarding by getting new hires quickly up to speed on software and skills related to their roles. According to the Aberdeen Group: Onboarding Benchmark Report, organizations reported that effective onboarding improved retention rates by 52 percent and time to productivity by 60 percent. For employees, long term outcomes of successful onboarding included job satisfaction and organizational commitment. Effective onboarding IMPROVED RETENTION RATES BY 52% and time to PRODUCTIVITY BY 60%* *Aberdeen Group: Onboarding Benchmark Report 17 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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improvement in employee retention Employees who are not provided training opportunities are more likely to find new jobs, according to the Harvard Business Review. But elearning allows employees to experience continuous development opportunities, making them feel more connected to their roles. And having a next level of training always available creates an environment of perpetual challenge, encouraging the development of a learning culture. The Society for Human Resource Management (SHRM) describes the cost to replace an employee as 50 to 250 percent of annual salary and benefits. fewer online searches Employees spend hours online looking for answers to simple questions in a vast sea of information. But effective online training provides instruction on a wide range of subjects and software applications, aggregating answers in a single resource with a consistent level of quality. 18 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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increaseD proDUctivity Elearning provides ongoing training opportunities, which can boost productivity (often measured by units produced, items sold, forms processed, and tasks completed). According to an IBM report, companies that use elearning tools and strategies have the potential to boost productivity by up to 50 percent. For every $1 that company spends on training, it realizes an estimated $30 worth of productivity. learninG proGram roi calcUlator Plug your data into this equation to evaluate the potential productivity gains and calculate the ROI of your learning program: ( ( 19 | Average Salary Per Employee X Hours Worked Per Year Number of Employees Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com ) ) X Time Savings or Productivity Gains = Total ROI


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increaseD employee enGaGement Employee engagement is a challenge at many organizations. But workers provided training that relates to their jobs and supports personal growth are more likely to feel completely engaged and connected to the workplace, according to the Harvard Business Review. When employees are not engaged, they don’t put energy or passion into work. Actively disengaged employees are distracted and unhappy. Gallup reports that 30 percent of employees are engaged, 52 percent are disengaged, and 18 percent actively disengaged. A disengaged employee costs an organization approximately $3,400 for every $10,000 of salary (Gallup). But organizations with highly engaged employees can decrease turnover by 87 percent (Human Capital Institute). When compared to competitors, organizations with high employee engagement are 12 percent more profitable and 18 percent more productive (Human Capital Institute). EMPLOYEE ENGAGEMENT COST A disengaged employee costs an organization approximately $3,400 FOR EVERY $10,000 OF SALARY Organizations with highly engaged employees can DECREASE TURNOVER BY 87%* *Gallup 20 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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Often, organizations struggle with how to measure employee engagement. Gallup proposes asking employees to respond yes or no to the following statements: yes no I know what is expected of me at work. At work, my opinions seem to count. I have the materials and equipment I need to do my work right. The mission or purpose of my company makes me feel my job is important. At work, I have the opportunity to do what I do best every day. My associates or fellow employees are committed to doing quality work. In the last seven days, I have received recognition or praise for doing good work. I have a best friend at work. My supervisor, or someone at work, seems to care about me as a person. In the last six months, someone at work has talked to me about my progress. There is someone at work who encourages my development. This last year, I have had opportunities at work to learn and grow. 21 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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A leading indicator of employee engagement is the effectiveness of a manager. Effective managers empower employees, recognize their contributions, and seek their input. It takes a specific skill set to be a great manager. Companies that hire or promote effective managers increase the odds of successful employee engagement. A manager role should be viewed as unique and requiring a specific skill set. Explore these curated lynda.com online tutorial playlists designed to help managers be more effective: 1. Develop: Empower managers to coach and develop employees, build business relationships, and provide effective employee feedback. www.lynda.com/develop 2. Delegate: Explore one of the keys to managerial success—the ability to effectively delegate responsibility. When managers delegate work to employees, they develop employees’ confidence, leadership, and work skills. www.lynda.com/delegate 3. Communicate: Effective communication is a fundamental management skill. Explore how to provide feedback—both good and bad. www.lynda.com/communicate 22 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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Measure You’ve identified needs, set goals, established success metrics, analyzed investment costs, and considered likely benefits. Now its time to measure your elearning success. 23 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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TACTIC NO. 6 Measure training success Conduct a survey Distribute pre- and post-learning questionnaires to a variety of employees from numerous departments—including individual contributors, managers, and executives. Make sure respondents represent a cross-section of your organization. Conduct the pre-learning survey one month before elearning begins. Share the post-learning survey two months later. 24 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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Post-learning feedback should cover: Pre-learning feedback should cover: • The effectiveness of current training initiatives • Current opportunities for learning and development • The effectiveness of elearning and new training initiatives • Current opportunities for development • Emphasis placed on learning and development • Emphasis placed on learning and development • Resources used for career growth or skills development • Skill increases realized as a result of elearning • Resources used to help in career growth or skill development For more information, view a questionnaire that lynda.com clients use to survey end users and understand the effectiveness of online learning. 25 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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Test a focus group Analyze impacts by researching the effects of your elearning program. Invite employees to participate as members of a control group. Test their skills before and after elearning. Use assessments Assessments help learners and their organizations measure improvement. Organizations that use elearning solutions offering assessments can verify that time spent training was worthwhile. 26 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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Achieving success Using these tactics, you can be better equipped to demonstrate that your elearning program has positive ROI. You will have successfully identified training needs, defined your goals, and established what success looks like. By understanding the costs and benefits of your elearning program, and how to measure learning, you can set the stage for success. 27 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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Author Savanah Barry Lead Generation Specialist Enterprise Marketing, lynda.com Savanah Barry is a marketing specialist at lynda.com focused on providing enterprise learning solutions to academic institutions, businesses, and government agencies. She is passionate about helping organizations achieve learning goals. 28 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com


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About lynda.com For 20 years, lynda.com has helped students, leaders, IT and design pros, project managers—anyone in any role—build software, creative, and business skills. We work with the best instructors. Our production standards are second to none. And with training that is quick to market, we’ve grown our online video-based content library to include thousands of engaging courses. Now a LinkedIn company, lynda.com serves more than 10,000 organizations. With tutorials presented in five languages, lynda.com is a global platform for success. 29 | Demonstrating Positive Elearning ROI: 6 Tactics for Success | lynda.com Contact us for lynda.com Enterprise Learning Solutions pricing. US: 1 (888) 335-9632 International: +1 (805) 477-3900 EMEA: +44 (0) 1252 416554 APAC: +61 2 9779 1582 email: enterprisesolutions@lynda.com web: www.lynda.com/industries


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