Build your employees, build your ROI
The Case for Training: Build People, Build Your ROI
November 27, 2019
By Jerusha Harvey
Today’s marketer is faced with multiple challenges, more so than ever before. Customers demand more from brands in terms of conversation and engagement, technology is constantly evolving, creative is increasingly being sourced inside. Compounding things, brands today are facing a talent crisis; in no other profession are students entering the workforce so far behind current practice. Perhaps the most significant challenge is the lack of investment in the development of talent. All this means marketing leaders struggle to keep their teams equipped with the latest skills.
How then are marketers to leverage talent to build a competitive advantage? The answer is in making a business centric argument for precious budget dollars.
The Business Impact of Marketing Training
At the ANA, we are keenly aware of the scarcity of studies that show the business impact of marketing training. To address this, we undertook such a study, covered substantially in the Harvard Business Review. The study, conducted in conjunction with Adobe, Spencer Stuart, and Millward Brown Vermeer (now Kantar), found that training proved to be the most important differentiator between under- and over-performing companies. In short, companies with marketing training programs significantly outperformed their competitors across all marketing competencies and capability performance showed to have the strongest influence on revenue growth.
Additionally, Udemy commissioned a study of Learning and Development (L&D) and HR executives to assess the state of the ROI of learning. While 44 percent of companies surveyed felt they were doing “very well” measuring the ROI of learning, most of these companies were only using metrics at Level 1 of the Kirkpatrick Model of learning (i.e., surveying respondent’s attendance/satisfaction) as opposed to measuring the actual impact of learning on job performance or overall business metrics. In fact, only 10 percent of respondents tied training to overall revenue growth.
So, if your company isn’t making the direct correlation of training to business metrics, how can you make the case that your training dollars are making a positive impact?
The Udemy study found the following key correlations between high-performing companies and their L&D spend:
- Higher employee engagement reported for companies that spend on L&D: For companies who increased their L&D budget in 2018, 54 percent reported high employee engagement; for those who did not increase their budget, only 31 percent reported high engagement.
- Training is a key indicator of growth-driven companies: 55 percent of high-growth companies averaged 30-50 learning hours per learner per year; whereas most low-growth companies had 0-30 hours. Overwhelmingly, high-growth companies spend above the national average on L&D.
- Increased productivity: 67 percent of companies surveyed reported higher productivity or faster onboarding after implementing an L&D program.
Metrics like these show the critical impact that ‘soft’ investments, such as training, have on key performance indicators, independent of industry.
Better Marketers = Better Business
Companies need more tools in their arsenal to meet the expanding skills requirements of modern marketing. Of course, there are many successful paths available to the marketing organization. While some companies have the budgets to build comprehensive training programs aligned to internal career pathing, others rely on simpler, internal e-learning platforms and career path guideposts. Still others look to outside third party providers and industry associations such as the ANA to fill those gaps. As studies have shown, these approaches have a positive impact whether they are done in house or outsourced.
It is clear from the research: companies that invest dollars in their people reap rewards not only in employee performance but also in higher than average returns in revenue growth. Even an incremental increase in a training budget can produce immediate returns in employee productivity and moral and it can produce dividends for long-term overall business performance. Training is integral to a healthy and successful business.
Jerusha Harvey is vice president at the ANA’s Marketing Training and Development Center.