While Corporate Training Budgets are increasingly pressured, most Learning and Development (L&D) teams still rely on basic reporting. Which do not convince Leadership of Training’s value.
Most industry statistics indicate that Course Attendance and Completion are the most commonly tracked metrics. But alone, they will seldom demonstrate a relationship to real business impact. This guide discusses the 7 changes to L&D Key Performance Indicators (KPIs). And how the proper use of these KPIs can help improve organizational performance and provide justification for the organization’s investment.
The Role of L&D KPIs in Today’s Organizations
Modern L&D is changing from tracking activity-based KPIs to providing value-added and measurable contributions to Business outcomes. KPIs such as Revenue, Productivity, and Employee Attrition. Organizations that use data to guide all managers’ decision-making, including Learning Initiatives, will produce higher rates of Productivity and Profitability.
- L&D leaders are under increasing pressure from executive leaders to demonstrate that Learning KPIs can be aligned with Business KPIs rather than relying on Learning “Off,” or Training only statistics.
- Benchmark Analysis indicates that the focus of organizations on L&D has been primarily on Training Metrics, but also now includes Monitoring Outcome-based Indicators.
How to Select L&D KPIs
There are no “one size fits all” L&D KPIs. Therefore, the most effective KPIs for each organization should connect specific Learning Initiatives to quantifiable Performance Gaps and Business Level Strategic Goals.
This means that Effective KPI Selection requires Collaboration among L&D Functional Groups, HR Functional Groups, Line Managers and Executive Leadership so that Learning Data can drive all organizations Real Decision Making.
Use historical Performance Data (i.e., Error Rates, Call Times, Product or Service Sales Conversion) to determine what type of training is required before you set KPIs. Don’t fall into the trap of only focusing on Lagging Indicator (i.e., Hours, Completions) as a measurement of performance and don’t assume Training is the cure for every Performance-related issue.
KPI 1: Training completion rate
This is a critical success factor in determining how many learners successfully complete a course or learning program. The completion rate generally serves to help us gain an initial understanding of how many learners participate in a training event or program, and how engaged they are.
Use this KPI for L&D managers
Training completion rates are best used in combination with other KPIs (such as assessment scores and job performance changes), not in isolation. For example, if employees complete a training course, but there’s no change in their behavior, this is often a sign that the content is not being applied due to a lack of understanding of the information or a lack of engagement with their manager. There is an opportunity to reassess how to redesign the training course or how to better support managers in developing their teams.
Set up a minimum completion threshold or rate for mandatory training (e.g. compliance, safety, and/or regulatory training).
You can break down this KPI by employee role, geographic location and manager, to understand where there’s a lack of training participation, and learn more about local barriers to training participation.
KPI 2: Learner engagement & activity
This measures how engaged employees are with their training. Engagement metrics measure different levels of interaction between employees and their training (time spent interacting, contributing in discussions, visiting the LMS more than once).
Engagement metrics can provide insight into whether or not the knowledge developed from a training course has been retained, and how likely the employee is to use this knowledge at work. Length of expected participation in forums, assignments or other forms of social learning activity .
Why Engagement KPI is Important
According to research on KPI-driven L&D, relying solely on lagging results does not capture early warning signs of learner disengagement. The research indicates that there is a positive correlation between learner engagement (KPI) and the likelihood of better learning outcomes. Factors that contribute to learner engagement can be influenced by design elements such as micro learning, interactivity, and the relevance of learning to day-to-day job functions.
By measuring engagement before and after design changes have been implemented (e.g., designing shorter modules or using more scenario-based learning), organizations can determine which changes will lead to increased participation in a learning program.
Organizations should utilize engagement heat maps to identify learning assets/content that have been abandoned by the learners. They’ll want to focus on revising those particular learning assets.
KPI 3: Knowledge Gain (Assessment Scores)
Knowledge gain is a measure of how much a learner has improved in their area of understanding or skill level, as a result of participating in a learning programmed. The evidence for knowledge gain is represented in the form of pre- and post-assessment scores, with scores representing learning level 2 of the Kirkpatrick Training Evaluation model. The Kirkpatrick model of training evaluation is one of the most widely used models.
Formula for calculating Knowledge Gain
Knowledge Gain = (average score on the post-assessment – average score on the pre-assessment) / average score on the pre-assessment x 100
How to Make Assessment Data Actionable
When organizations use assessment data as an actionable KPI, it becomes a powerful tool to drive content decisions, coaching, and role-specific benchmarks rather than just pass/fail thresholds. When an organization identifies that a majority of its employees scored poorly on a specific topic or question, this should trigger a revision to the learning content, additional practice, or targeted support for specific groups of employees.
- Organizations should closely align the assessment questions with actual day-to-day job tasks. In doing so, organizations will be able to determine if learners’ higher assessment scores correlate to an employable level of competence, versus solely the ability to recall what has been learned.
- Organizations should consider pairing both quantitative scores (i.e., assessment scores) with qualitative feedback about the degree of difficulty and relevance of the learning content, in order to improve both the content and the assessments utilized in the learning programmed.
Additional Read:
Employee Training and Engagement: How a WordPress LMS Plugin Binds the Pieces Together?
KPI 4: The Key Performance Indicator
Time to Proficiency (or Ramp-Up Time) determines how long it will take an employee to complete his/her training after they have been hired or re-trained. Training must be accomplished through structured onboarding or role-based paths, and according to data, time frame targets to become productive will decrease.
To calculate
“Time To Proficiency” utilize the following formula: Time To Proficiency = Days between training start date and date the learner consistently performs against relevant KPI’s (e.g., meets sales quota or maintains required quality level) on a consistent basis.
Why Ramp‑Up Time Is a Strategic KPI
Ramp-up time not only demonstrates the quality of training, but also the degree of manager involvement, job aids provided, and any on-the-job coaching the employee has received; therefore, it provides a systems perspective on how learning occurs.
- Goals for proficiency levels should be agreed to at the outset with a learner’s supervisor, such as: “meets or exceeds an X ticket/day production level at a Y quality level.”
- To compare the impact of structured versus ad-hoc onboarding, track cohorts’ ramp-up times and/or performance following completion of training.
KPI 5: Behavioral Change Transfer of Learning
Behavioral change seeks to assess whether learners utilize new knowledge and skills in the workplace. This KPI corresponds to Level 3 of the Kirkpatrick Model and has been widely accepted as one of the KPIs of critical importance.
Many professionals agree transfer of learning is one of the most critical single KPI because it demonstrates whether training actually produces performance improvements.
Ways to Measure Changes in the Workforce’s Performance Behavior
- Collect feedback on composition from managers and peers on observable behaviors.
- Have on-the-job performance checklists created and used to verify performance behaviors of employees before and after training. 3. Lead time performance indicators for employees, including means to measure errors or customers issues for trained employees.
Utilizing Behavior KPI In Day-to-Day Operations
The average learning and development professional will use this data as a basis for understanding where to support learning by nudging employees, hearing employees’ comments about their need for immediate assistance, developing a training guide or other information to support employee learning.
Additionally, behavior KPI can help document when training barriers exist as a result of indecipherable or misconfigured processes, tools or financial rewards.
Schedule to conduct behavior follow-up assessments on a continuing basis (30-90 days after training) and use them to establish performance expectations for employees receiving training.
Additionally, use behavior KPI data to determine priority for investments in additional coaching, performance support or redesigning programs.
KPI 6: Business Outcome Uplift
KPI 6 also relates to Business Outcome Uplift, which links training to key metrics that leadership is already familiar with, such as revenue, productivity, quality and accident rates, and customer satisfaction. Business Outcome Uplift will correlate to Level 4 as defined by the Kirkpatrick Model and the business impact tiers in the Phillips ROI Model. Types of KPIs for Potential Business Outcomes
Examples of KPIs that measure potential business outcomes are:
- Sales: Conversion rate, Size of deal when closed, and Velocity of pipeline.
- Operations: Cycle time, Output per hour, and Defect rate.
- Customer Service: Average handle time, First Contact Resolution, CSAT or NPS.
- Human Resources: Voluntary turnover, Internal mobility, and Promotion rates.
Isolating the Impact of Training
The emphasis in contemporary ROI models is the importance placed on isolating the impact of training from other variables through the use of control groups, trends, or statistical means. In addition to these methodologies, establishing baseline metrics and then comparing the results of trained versus untrained or the results of pre/post-programs as a baseline metric creates a greater degree of credibility in regard to business outcome metrics.
As a starting point, agree with stakeholders on which of the business KPIs a specific learning program is going to influence, and establish baseline metrics prior to launching any program.
The results of the pilot program, A/B tests, or the establishment of a staggered rollout can be used to compare groups for a portion of their gains attributable to training.
KPI 7: Training ROI (Return on Investment)
ROI for training expresses the financial value of the returns generated by a learning and development program when expressed as a percentage of the total expenditures associated with that program; this makes the KPI compelling for learning and development departments seeking to secure or expand their budget.
The Phillips model of ROI is based on the Kirkpatrick framework and in addition to measuring seven significant impacts of training (monetary benefits and expenditure total) also includes an explicit financial return on investment level as an additional value-added evaluation methodology comparing the monetary benefits of training to the total costs of offering training.
Formula:
ROI = (Monetary Benefits – Training Costs) / Training Costs 100
When and How to Use the ROI KPI
ROI works especially well for higher-stakes and/or higher-cost projects, particularly when leadership expects to see clear financial justification instead of simple engagement or satisfaction measure. To accurately and successfully utilize ROI as a viable KPI for any learning program, learning and development professionals must be tiered about the respective data collected and employ reasonable assumptions when calculating ROI. Making the case for establishing ROI provides ample evidence that L&D is actively managed with the same level of precision as other strategic investments made by organizations.
- Include both direct and indirect costs (design, delivery, and time off work) and quantify the benefits derived from the improved productivity and lower error rates.
- The ROI is often presented together with other non-financial business outcomes such as reduced risk, improved performance engagement, and other relevant metrics that provide a more complete picture of the impact of the learning program.
L&D KPIs Mapped to Evaluation Models
The evaluation frameworks most widely utilized in L&D emphasize measuring the effectiveness of learning programs by measuring metrics that are independent of each other; for example, in the Kirkpatrick and Phillips frameworks, reaction measured at the first level, learning measured at the second level, behavior or performance evaluated at the third level (previously called behavior change), results measured at the fourth level (previously called performance) and finally, the ROI thickening in the fifth level.
| Evaluation Level | Typical Focus | Relevant KPIs from This Guide |
|---|---|---|
| Level 1: Reaction | Learner satisfaction | Satisfaction scores, qualitative feedback |
| Level 2: Learning | Knowledge/skill gain | Assessment scores, knowledge gain |
| Level 3: Behavior | On‑the‑job application | Behavior change indicators, transfer of learning |
| Level 4: Results | Business outcomes | Productivity, quality, sales, retention metrics |
| Level 5: ROI | Financial return | Training ROI percentage, cost–benefit ratio |
The chain of evidence helps to demonstrate to L&D teams that learners did not just attend the training, but they were able to demonstrate that the training provided them with skills to be used within their respective roles, and as such had a true and measurable impact on the success of their organizations. This also prompts L&D teams to consider and plan for winter and summer KPI’s when designing training programmed before the development of the training content itself.
KPI Matrix – L&D Dashboard
Most dashboards developed recently indicate that the majority of organizations are excessively focused on attendance and completion as the primary focus of the data integration process and this is the primary struggle within many companies’ technology solutions. The modern L&D dashboard would display a limited number of leading and lagging indicators that tie learning directly to performance outcomes and business performance.
KPI Tiles
Leading indicators: enrolment, completion, engagement, knowledge gained
Lagging indicators: behavior change, business performance increase, ROI
Pragmatic Approach to your KPI System
The majority of L&D KPI resources recommend a phased approach to establishing your KPI system by initially implementing only a small number of KPIs to collect over time until all of the KPIs are established. Most teams will find success using the following cycle:
- Identify 1–2 core business challenges (e.g. High turnover, prolonged onboarding, low customer satisfaction scores).
- Define measurable metrics associated with each identified core business challenge (e.g., time to first sale, average handling time).
- Select a focused set of the seven L&D KPIs that will allow for logical comparisons between L&D Learning KPIs and the defined performance metrics.
- Collect and establish baseline data for the selected KPIs when designing the respective programmes, and include control groups, if possible.
- Review KPI results on a quarterly basis, and communicate results to key stakeholders to improve and refine programmes and KPI dashboards going forward.
Closing Thoughts
By establishing a concentrated KPI matrix focusing on completion, engagement, knowledge gain, time to proficiency, behavior change, business uplift, or ROI, and aligning these KPI’s to actual business problems using validated evaluation methodologies, it becomes clear that L&D leaders are best positioned to prove the value of their role at the executive level and therefore create opportunities for additional investment into the L&D function.
