Solving the ROI Riddle: Experts Discuss Ways to Quantify The Business Impact of Skill Development

In the current competitive workspace, further revolutionised by AI and fast-changing tech, staying relevant means upskilling to catch up. But also, as the landscape changes quickly, skills tend to become obsolete. In that light, is skill development really a business multiplier? If it is, how do we measure the impact? And more importantly, how can these organisations harvest skill-development as a crucial enabler in their business growth strategy?

To find answers to these pertinent questions, People Matters, in collaboration with Coursera, hosted a webinar on “The ROI Riddle: Transforming Organisations and Achieving Business Outcomes Through Skill Development.” Industry leaders, like Mohan Sitharam, CHRO, Shadowfax; Shradha Mehta, Group HR Head, L&OD, Thermax Limited; Marco Angelo Padernal, Human Resources Director, Robinson's Retail Holdings Inc., and Charlotte Evans, Director, Global Customer Advocacy, Coursera for Business, deliberated on positioning ROI as central to securing learning investments and aligning L&D with broader organisational goals.

A pressing issue that organisations face today is the question of unlocking real business impact through skill development and the means to prove it. This is a riddle that's both timely and transformative.

“For years, the learning function quietly fuelled productivity, helping employees stay competitive and capable, but with the shrinking shelf life of skills and redefining roles, along with evolving expectations, the bigger challenge today for L&D is to connect learning investments to measurable business outcomes,” shares Charlotte.

Skill gaps today are seen as the single biggest barrier to business transformation, with 63% of employers calling them a critical challenge between now and 2030, according to the World Economic Forum.

The real question for organisations is no longer whether or not to invest in learning, but how those learning initiatives can truly impact business outcomes. But in Learning & Development, articulating the value in measurable terms is a challenge for leaders, as traditional metrics like course completions, number of learning hours, usage, or licences redeemed - only scratch the surface of the issue and don't really capture the deeper, more transformative impact that L&D can have on people and organisations. Furthermore, what may work for one organisation may not work for another.

Identifying the biggest revenue drivers in an organisation and seeking out skills that align with elevating revenue and reducing costs can be a go-to solution. If organisations are able to show this crisp ROI story that connects the bottom line to pounds, that narrative about the business justification becomes much clearer and cleaner for executives.

“L&D is one of the many factors that would impact the business results, because they work alongside culture, strategy, your market conditions, and so many other things, and also,  numbers. There's something with numbers you can really beat data to take any shape that you want to and, you know, any narrative that you want the data to support,” adds Shradha.

How do learning leaders effectively demonstrate the value of an L&D investment or the ROI of an upskilling initiative to secure that buy-in?

The experts debate on a few key areas to showcase the economic impact: 

First is “productivity gain” - correlating productivity lift to consolidated skill-building platforms like Coursera, specifically, that provide personalised interactive learning of verified skills that admins can also customise to meet their business goals. This not only helps regulate company costs, but also, by measuring yearly logarithmic lifts of employee productivity, can identify business growth vis-à-vis.

It is the job of CHROs, points out Mohan, to draw these parallels for business leaders. He also adds that business leaders need to be shown the connection between critical skills and revenue generation. There's missed revenue within certain teams if they're not able to fill in certain skill gaps, wherein the infusion of AI in tech and IT teams is an example. There is a rampant need to upskill in AI, the experts agree. There's a massive shift in the skilling of these teams that can drive forward revenue.

Charlotte also highlights the importance of educating employees on their need to upskill. Some companies like Thermax use an internal framework that maps role competencies, identifies gaps, and generates a Talent Readiness Index. This helps uncover the root of productivity and quality issues, proving the need to focus on the critical 20 percent skills that truly drive results. But Mohan also pinpoints how skill-building has become more of a career growth imperative than a business need. This is because, he stresses, learning cannot be quantified. 

As Marco also points out, there is currently a shift from traditional job roles to a focus on skills.

“Skills are more adaptable, transferable, and enable better talent mobility and quicker adaptability. Focusing on skills gives us a better view of the talent landscape, in the talent development plan, and addressing learning gaps,” adds Marco. 

But the challenge here is that skill development is a human aspect. The percentage of readiness is bound to be subjective, says Mohan. The onus of learning must be on the individual and not the employer, he shares.

Here, Charlotte mentions the ROI Calculator that Coursera adopts, where organisations can input and measure individual learning metrics via data calculations. But dealing with data does come with its added risks. Thus, organisations also use other methods in measuring productivity, like making all decisions in alignment with business strategy, and using creative methods like storytelling via individual employee case studies to track how learning has impacted behaviour. 

Whilst learning and business growth certainly have a connection, how do you prove that across the board? Because, as Marco adds, “Learning is also wellness - that is also growth for the individual. When different team members bring in diverse skills, there's a mix of talents that greatly contribute to the business objectives.”

Thus, a quantified skill proficiency allows the best leverage here - proving how high-performance output backed by skills cultivated through targeted learning, connects to revenue generation.