Article

Understanding Key Performance Indicators for Employee Training Programs

Understanding key performance indicators for employee training programs

Whether you’re just starting out with basic employee training or you have a fully developed program, seeing any sort of growth and success can’t happen without understanding key performance indicators.

When you’re looking at the right key performance indicators (KPIs), it’s much easier to see if your training is having the outcomes and return on investment you’d hoped it would.

In this post, we’ll help you understand KPI development for employee training programs (with some KPI examples to get you started) so you can prove the value of learning in your organization.

What Are Key Performance Indicators for Training and Development?

If you’re unfamiliar with KPIs, here’s a great definition from ClearPoint Strategy:

“In its simplest form, a KPI is a type of performance measurement that helps you understand how your organization or department is performing. A good KPI should act as a compass, helping you and your team understand whether you’re taking the right path toward your strategic goals.”

Key performance indicators are absolutely necessary for every employee training program.

If you don’t know your KPIs, you can’t know if your training is getting a positive ROI, and that’s what leaders use to gauge whether your training program should receive more or less investment.

If you already have a training program in place but don’t have KPIs, it’s time to get them on your radar!

If you do already have KPIs for training, don’t settle in and think those will suffice for the long-haul. Using KPIs for measuring training effectiveness requires continually looking at the goals of job roles, teams, and the organization overall.

If your training program is brand new, it’s okay to focus on KPIs specific to the training itself, but as your program grows, you’ll need to add more KPIs that show how training is influencing overall business results.

Tracking KPIs can feel like a lot of work, but there is plenty of technology available to make it streamlined and simple. In a Training Industry article, Ehsan Memari describes some of the KPIs you can track using a learning management system – and there are tons more on top of these!

Here are a few KPI examples you can track with an LMS:

  • Overall utilization rates: This would include online course launches, classroom session attendees, and participants in other types of optional or mandatory training you offer
  • Course completion rates: You can see how much required or elective training was completed
  • Pass/Fail rates and average scores for quizzes and tests: This will help you determine if employees are understanding the information
  • Percent of employees satisfied with training: Surveys and feedback on your training can tell you how to improve employee development

Where to Start with Choosing KPIs to Track

The key performance indicators you choose to track should correlate directly with goals established at various levels. They may be goals for individual employees, for different departments, and for the whole organization.

So if you don’t know the goals for your training initiatives, start there!

Check out this podcast episode on how to set learning and development goals. 

One place that commonly trips people up with choosing KPIs is when they look at lagging indicators instead of leading indicators. The founder and CEO of Self-Publishing School, Chandler Bolt, explains it this way:

“A lagging indicator for sales might be revenue… the leading indicator is focused on ‘controlling the controllables.’ It’s really about breaking down the micro things you can control that lead up to the lagging indicators. For sales, we’re talking about: how many appointments were completed, how many outbound calls were made, what was the close rate, what’s the average order value, etc.”

You can’t directly control factors like revenue and client retention, so you have to look at the actions that influence those results.

For employee training, you can apply this to bigger challenges like employee turnover – there are “controllables” that influence turnover, like poor management or lack of development opportunities, among many others. So, for example, “percent of employees satisfied with development opportunities” could be a leading indicator for turnover rates (a lagging indicator).

KPI development for training also means looking at goals and progress for individual employees – after all, organizational success only comes from individuals’ collective successes. 

Cassie Whitlock, Director of HR with BambooHR, says, “To decide on training KPIs, you need to bounce forward through the employee lifecycle… What are the measurements you’d look at as far as contributions that might qualify someone for a raise, bonus, etc.? Those measurements should tie right back into the KPIs you’ll track during training.”

This is why competency models are very useful for training programs – mapping competencies to job roles will help you see if individuals are reaching their defined level of success, and if not, then it’ll reveal exactly how you can help them get there.

Learn how to implement competency-based training with this free ebook.

Balancing Hard and Soft KPIs

Another factor in choosing the key performance indicators you want to track is how you will balance both hard and soft KPIs.

Using both types of KPIs will give you a fuller picture of the effects of your training program, rather than only looking at the hard metrics.

So what’s the difference between hard and soft indicators?

There may be some overlap between the two, but generally, hard KPIs are things that can be tangibly measured (think course completions), while soft KPIs are more related to attitudes (think satisfaction). 

To understand attitudes, you can use surveys, interviews, or observed behaviors that could indicate changes in morale.

Evan Hackel gives these examples of soft KPIs in a Training Industry article:

  • Do members of your front desk staff feel calmer and more confident about resolving customer complaints?
  • Do your new hires now feel more enthusiastic about working for your company?
  • Do employees now expect to remain at your company for longer periods of time?

Using soft KPIs alongside hard KPIs will give you the best vantage point for proving the extent of return on your organization’s training investments.

Ciara Hautau, trainer of the marketing team at Fueled, found that rather than only measuring efficiency, giving weight to soft KPIs has helped them to unlock greater talent within their team members.

She says, “To me, the best KPI for an employee to aspire to is being proactive in feedback and ideas. Anyone can follow directions given to them, but it takes a unique team member to analyze the task in front of them, execute in a way that is thoughtful and results driven, and provide suggestions on improving the process in the future.”

Using Your KPIs for Measuring Training Effectiveness

The most common KPI we see training professionals look at is utilization. If your program is purely focused on the completion of compliance training events as a requirement for training success, then utilization works well as one of your main KPIs.

However, as soon as you step beyond training for the compliance checklist (and we hope you will!), utilization needs to take a backseat to KPIs that actually show the difference training is making in behaviors and outcomes.

“It’s not just about getting the training done, it’s about doing it right.”

– Cassie Whitlock

When you’ve chosen KPIs that are aligned with the goals of individuals, teams, and the organization, keeping track of those KPIs on a consistent basis will show you where your training is influencing results and helping to meet goals.

Soft KPIs can especially reveal areas where training contributed to positive changes, even where it wasn’t designed to. Positive side effects are a common occurrence with strong training programs!

KPI Examples that Align Training with Business Goals

Now that we’ve discussed why and how to develop key performance indicators, let’s look at some more KPI examples you might use to prove the impact of training on business results.

Customer Satisfaction Rates: Training your workforce to provide great customer service contributes to increased customer satisfaction and retention.

Onboarding – Time to Full Productivity: A smooth onboarding process will enable new employees to reach full productivity in their roles faster.

Number of Compliance Infractions or Incident Reports: When your dedication to effective compliance training permeates company culture, these numbers (and their associated costliness) will decrease.

Close Rates for Sales: Sales training has many facets – the sales process, the industry, your products/services, buyers’ pain points, and all the soft skills that go into winning over customers.

New Manager Effectiveness: There are new skills involved when individual contributors become managers – training new managers properly increases the overall productivity, engagement, and effectiveness of their teams.

Employee Net Promoter Score: Many surveys have shown that training and development is a key factor in employee engagement and satisfaction today, so improving those opportunities often yields an increase in eNPS scores. 

Rate of Internal Job Promotions: If you’re doing more internal hiring rather than relying on external hires, that indicates your training program is proving more effective with developing the skills people need for more advanced roles. Internal hires are less costly and have proven to be more likely to succeed in their roles than external hires.

Since development opportunities and career growth are the top factors in gaining and retaining talented employees today, demonstrating that your program is contributing to employee retention in a variety of ways is the greatest training ROI you can find!

Want to learn more about measuring training effectiveness?

This free ebook will help you determine the value of soft skills training in your organization:

SEO Strategist at BizLibrary