Four easy ways for business to increase return on investment from learning initiatives
'Ready, Set, Upskill', a report by RMIT Online and Deloitte Access Economics, projects a significant uptick in learning and development spending by businesses in 2024, around $8 billion - up 15% from the previous year.
It's an encouraging increase. But we're not there yet.
Concerningly, 45% of organisations are failing to prioritise their learning budgets effectively towards the skills gaps in their organisations, leaving them unable to maximise the return on their investment in learning.
In the dynamic and challenging landscape Australian businesses are currently facing where uncertainty is the only certainty, maximising the ROI of learning is not nice to have but essential for success.
In this context, we're not simply talking about the success of L&D initiatives. The benefits offer a ricochet effect for businesses, employees, and the broader economy - offering better career development opportunities, reduced staff turnover, increased productivity, better efficiencies, and, ultimately, better business outcomes.
So how can businesses increase their learning budgets return on investment?
1. The metrics of progress
Almost one in five (17%) of organisations surveyed don't measure, or don't know how to measure, the return on investment of learning. Re-framing the concept of ROI away from pure financial metrics and towards a broader definition of "business impact" can help.
As a first step, businesses should measure progression to the performance of behaviours and job tasks associated with various skills. For example, is the participant demonstrating increased knowledge or enhanced decision-making competence? Measurement tools and analytics can be used to gain insights into existing skills deficiencies across various departments and roles within the organisation.
2. Strategic alignment by matching training programs to skills gaps
While digital skills are the most prevalent skills gaps, Australian businesses are disproportionately prioritising investment in leadership and business skills. These skills are important but the data tells us that the bigger skills needs exist in digital domains across the broader workforce.
To yield the biggest return on investment, businesses need to get their priorities in check and invest in aligning learning and development spending directly against skills gaps, which in this case is digital skills. This can be done by conducting thorough needs assessments and mapping out skill requirements through upskilling or hiring individuals with specialised expertise; strategic alignment ensures that investment yields tangible returns.
3. Better capture on-the-job training activities
Organisations often overlook learning opportunities that are embedded within daily work experiences, in favour of 'content bites' that remain in the theoretical realm. Learning that has in-built opportunities for employees to apply theoretical knowledge in real-world situations, and practise it immediately are most likely to lead to behaviour change and business impact. These informal learning experiences are frequently underutilised and inadequately documented.
Some of the activities to take advantage of include creating avenues for knowledge sharing, mentorship programs, lunch and learn sessions with peers and leaders, and using platforms for documenting and tracking skill acquisition in the context of daily work tasks. The best external learning solutions will credential your team for demonstrating they've applied a new skill in their world of work.
4. Utilising new technologies such as Generative AI
The pace of digital transformation is accelerating so much that it is difficult for our skills to keep pace without consistent and dedicated upskilling. Leveraging the cutting-edge technologies at our disposal is paramount to staying ahead of the curve. As such, Generative AI holds immense promise for revolutionising the landscape of skills development.
However, there remains a significant gap between employee uptake and business investment in adopting and training in Generative AI tools. More than three in four (78%) employers have either not provided or are unaware of Generative AI training in their organisation, while 17% of employers do not anticipate Generative AI training will ever be provided.
Generative AI has a significant impact on the demand for skills, which varies depending on the tasks it affects within each role, with differences observed across industries. In situations where Generative AI enhances tasks rather than automates them entirely, individuals possessing foundational technical skills such as coding and prompt design stand to derive the greatest benefits from its implementation.
The true currency for businesses lies in the adept skills of their workforce. By prioritising strategic investments in skills development and adopting a multifaceted approach encompassing measurement, strategic alignment, experiential learning, and technological innovation, businesses can equip their workforce to thrive amidst uncertainty and chart a path toward long-term success.
