How to identify L&D KPIs that matter to the business

by | Aug 15, 2017 | Articles, Featured

When there are so many things you could be measuring or reporting on, how do you identify L&D KPIs that the business cares about? Here’s how to turn the heads of your business leaders with metrics that matter.

L&D KPIs are the backbone of your strategy – the metrics you are trying to affect for business benefit. They form the basis of your impact on the organisation, help you compile a business case for new investment and open up conversations with business leaders that you previously couldn’t have without evidence to back up your suggestions. Having the right metrics, that business leaders care about, gives the L&D team a chance to prove that they are a valuable and effective part of the business.

Modern L&D KPIs focus on business benefit

In today’s environment where technology is disrupting business faster than organisations can evolve, learning plays a vital role in ensuring employees have the right skills and knowledge in place. Without an agile L&D team, the business suffers, whether the C-suite realise or not.

L&D KPIs have historically revolved around cost, such as overall training budget, seat/classroom time and cost per head. Reporting back on these KPIs, combined with an increased pressure from the C-suite to deliver more for less, has backed L&D into a corner with little voice into how business leverages learning to embrace change.

To manoeuvre away from an identity as “the department that cuts costs”, today’s L&D teams need to demonstrate value to the business, which, as our research has shown, is a challenge in itself.

In Unlocking Potential, we reported that 79% of the Top Deck* identify specific business metrics/KPIs to improve in partnership with senior management up front, but only 25% of the rest are doing the same. To add, 97% of the Top Deck report that business leaders recognise their alignment with the business strategy, compared with 37% of the rest.

This reveals a huge disparity between the L&D teams who are seeing tangible business impact and teams who don’t.

What the right KPIs can help you achieve

Data is vital; it provides the evidence you and your team need to understand impact and drive performance. An invaluable source of external, credible data is performance benchmarking – this provides robust, genuine and independent evidence on L&D’s impact; the effectiveness and impact of facilitated learning. It enables organisations to reflect on their own performance and see how they compare against peers and top performing organisations.

With the right KPIs and the right framework for comparison on what success looks like, an L&D team can truly impress the business by demonstrating a clear impact through learning. Establishing clear links between learning and business benefits will help even the largest organisations to pivot into strategies that depend on learning for agility and success.

Essential L&D KPIs that matter to business

Thankfully, you don’t have to run a 5-day workshop to find out what KPIs to report on. Through our research, we’ve identified 12 Key Performance Indicators that many organisations have in common, which will all catch the ears of the C-suite.

These relate to business impact (ability to implement change faster, productivity and ultimate customer satisfaction), staff impact (linked to staff engagement, qualifications and time to competency) and efficiency (linked to cashable savings and time savings). This research dates back as far as 2003 and has already covered over 6,000 organisations, so you can trust us.

Through benchmarking, we give you a critical output that helps you directly compare your results with top performing peers to define priority actions. Our 3-step benchmarking process – Review, Compare, Act – helps you identify actions you need to take in order to improve results and integrate learning into the workflow more effectively.

Although you’ll still need to have a few business-specific KPIs that should be agreed on in partnership with senior leaders (see our stat earlier in this article), this provides you with a great start on demonstrating value to the business.

Tips for finding business-specific L&D KPIs:

  • Ask yourselves, “how are we proving how we support the business?” Identify the metric that reflects your answer.
  • Identify role-specific KPIs that you can impact (e.g. retention rates of sales staff beyond 6 months, or revenue generated by sales staff in first 6 months)
  • Ask line managers what their biggest struggle is, then identify a directly related metric you could improve through learning

Towards Maturity’s Personalised Benchmark Report highlights your scores in comparison with industry benchmarks for the following and more:

  • 12 Key Performance Indicators (KPIs): looking at business impact, staff impact and efficiency benefits that are being achieved
  • 5 Technology Take-Up Indicators: considering budget allocation and engagement, to help you review your level of investment in technology
  • Risk Indicators: to help you compare your greatest barriers to progress with others in top learning companies
  • Benefits: to help you understand the intangible benefits that are critical to delivering a modernised learning strategy
  • 19 Effective Practice Indicators: to help you understand how you compare directly with the top learning companies
  • And new features for 2017…

Additionally, consider asking your people how they like to learn and what they need to know; then feed this information to business leaders. Towards Maturity can do this for you, producing a personalised report that can help you understand more comprehensively how your staff learn, both formally and informally, to inform the learning strategy.

Compare your L&D strategy with the Towards Maturity Health Check

*Top Deck = organisations in the top 10% on the Towards Maturity Index, our score for L&D maturity calculated by the Towards Maturity Benchmark.

Compare your L&D strategy

Review your L&D strategy to discover your strengths and opportunities for improvement with the Towards Maturity Health Check.

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