Proving the value of training for an organization is perhaps one of the most difficult things that keeps most Learning and Development managers up at night. 4
Measuring training ROI is already difficult with how learning systems operate. However, despite all the stats out there telling us that training is effective, some nagging questions remain in the back of our heads.
In what ways is my company really benefiting from training investments? And what kind of training will be more effective in achieving my goals?
How WalMart Championed Employee Training & Development
In 2015, the company implemented a general pay raise and creation of 200 face-to-face training programs including Live Better U and the Pathways career development programs. With an investment of about $2.7 billion, the question is whether the program will generate bottom-line results.
Impact on revenues was immediately recorded, with a $5 billion increase in sales. Beyond that, stores saw improvement in customer surveys and a decrease in employee turnover. This should translate into lower hiring and training costs in the future.
A Forbes story identifies benefits directly related to training investments, such as attracting a better caliber of workers who are eager to achieve management status, more orderly stores, brand loyalty from employees, and friendlier environments contributing to employee morale.
In-Person Training Delivers Positive Training ROI
This begs another question: What kind of training is Walmart using to achieve these results?
Employee training programs mix four days of in-person training on site with applied on-the-job training at a Walmart location. Why not use an LMS to deliver 100% of training? The answer is simple: it works and, its what learners (employees) want.
Jordan, an employee in the Walmart learning academy in the Arizona branch, noted team-building activities as her favorite aspect of training according to the Arizona Republic.
Granted, what employees prefer is not necessarily what is the most effective. But all the following aspects of training, which were central in improving in-store experience and employee confidence in skill sets, relied on face-to-face interaction 87% of the time.
Other training aspects that relied on face-to-face interaction include:
- Building a company culture of teamwork and clear communication
- Fostering leadership as a core value in employees
- Cultivating employee satisfaction through in-person professional relationships
- Exposing employees to the kind of interaction they will experience on their day-to-day job, in order to improve in-store experience
This is an anomaly by today’s corporate training standards given that with so much talk about the efficiency of online and mobile learning, some would consider this approach obsolete.
Even in the 21st century, with so much research in L&D itself, most learning professionals still debate on when or where to use online vs in-person training for large scale training programs (short answer: it depends what the goal is!).
Much of the training provided at the corproate level, such as compliance and onboarding training are indeed delivered by an online training platform such as an LMS. But providing training in this manner only covers the bases in a satisfactory manner. When it comes to measuring ROI for training can training managers really say that all learners:
- Understood the onboaring protocols
- Have a clear idea of safety rules and regulations
- Understand how to implement the tools and software they’re supposed to use
- Are working withing compliance standards for various organizations? (i.e. OSHA)
But Walmart continues to prove that face-to-face training (ILT) is key to many of the benefits that companies are seeking: training programs that can engage learners, develop professionals, and deliver measurable ROI.
It also sheds some light on the trend we see with some of the largest companies developing corporate learning academies, in-house training programs desgined to train and nurture employees in accordance to corporate curriculum.
Increasing Training ROI means Augmenting ILT
So what’s the next step for Walmart? The company is following through in establishing 200 academies before December 2017. They’re aiming to provide academy training for 140,000 employees. This is no small task.
Walmart has proven that face-to-face training is effective despite recent concerns about traditional ILT being perceived as ineffective. However, the $5 billion increase in sales has not yet had a positive effect on the bottom line. In fact, operating income was brought down in 2016 by higher labor costs and training investments.
For Walmart to translate the increased revenues into profits, one of the main challenges ahead will be to make in-person training more efficient and make the most of its in-house 200 corporate learning academies.
The gains from in-person training are enormous. But, unlike online learning, it requires complex logistics, resource optimization, and expert budgeting to achieve maximum efficiency. This is just the start for Walmart. As it learns to rationalize training processes, it should be on its way to reaping even more results in the next few years.
Delivering More Training With Less Cost: Utilizing the Course Management System
Walmart is a clear example of how effective Instructor-Led Training (ILT) can be; but yes, it remains costly. Training ROI is about efficiency as much as effectiveness.
How can companies train more and better with less? In a recent study based on its experience in managing more than $1.5 billion of training budgets for some of the best companies, Training Orchestra has found that the channels to optimize training investments are the following:
- Maximizing session occupancy rates and resource use
- Tracking costs in real-time
- Building a robust training plan and forecasting future investments
- Automating administration to increase productivity
- Accessing precise reporting
Surprisingly enough, while most of the largest companies invest in costly LMSs, they do not have the tools to manage these ILT processes. Why is that? One of the main reasons is that companies expect their LMS to help them optimize ILT. This is something that LMSs are not built to do.
They are tools designed primarily to manage eLearning. There are many differences between a training management system and a learning management system. Implementing a Course Management System and streamlining these specific processes can enable 15 to 20% of training budget optimization.
ILT as the Gold Standard for Employee Training Programs
WalMart’s employee development program is proof that when it comes to skills development and upskilling multiple locations, F2F training delivery is the most effective and preferred option for learners and organizations alike.
And yes, it can be well-managed. So next time the training ROI question comes back, you’ll have two more answers to give.
About Training Orchestra
As a leader in L&D management and the growing discipline of learning operations, Training Orchestra is the premiere provider of training management solutions for those seeking to streamline how they plan and schedule instructor-led training, in-person or conducted live online.
With our award winning Course Management System, we are a fully integrated cloud solution dedicated to streamlining training management for L&D teams including in-house training departments, corporate learning academies, external training providers, and managed learning services providers.
Covering the whole training process: finance, logistics, administration, sales and portal, Training Orchestra has proven its efficiency with over 600 satisfied clients and 6 billion of training budgets managed. Training Orchestra allows its users to drive their training activities, track and optimize forecasts, enhance productivity, ensure employee satisfaction and customer loyalty.
