Performance metrics play an important role in business growth – and in learning and development. While L&D has a noble and personable part to play in the growth of employees – the underlying reason many organizations participate in training initiatives is to make their business more profitable. Improved employee retention, higher productivity, increased longevity, reduced turnover – all of these are metrics used to measure performance that are directly tied to L&D success and higher profits.
What are performance metric examples?
There can be some confusion around metrics used to measure performance versus KPIs (Key Performance Indicators). To put it simply, business performance metrics are raw data – it’s not being measured against anything. When that same data is measured against a goal, it becomes a KPI.
Types of performance metrics that are often tracked include:
- Business performance metrics
- Sales performance metrics
- Project management performance metrics
- Employee performance metrics
How L&D Can Improve Your Performance Metrics
Learning and development can be tied to many performance metrics – although this sometimes does depend on the size and diversity of your content library. Content can be assigned to employees on a variety of topics – customer service, productivity, sales techniques, and many others. Successful learning and development strategies should be able to make a difference in improving many performance metrics. The trick to determining how L&D is making an impact on overall performance metrics is tracking the correct metrics and finding the correlation between its intended result.
L&D Metrics to Track
If you’re looking for types of performance metrics to begin tracking in L&D to identify how it’s impacting your organization, here are a few to begin with.
- Number of course launches
If your organization is practicing elective learning only, number of course launches and most launched courses would be effective metrics to track. You can compare these numbers to other performance metrics month over month and determine if there was any plausible impact.
- Completion Rate
It’s important to note that while many courses may be launched, that doesn’t mean they’re being completed. Tracking completion rates may have an even bigger impact on the bottom line, as its more likely that the learners have a better understanding of the subject matter.
- Number of active users vs total users
Keep track of how many of your employees are active users in the LMS – that will also help determine the cost per learner and the ROI of training. It’s even more useful if you can identify learners by their job roles within the LMS to compare those numbers against team performance.
Business performance metrics
This is the broadest category of performance metrics and can often be used as an umbrella term for any kind of performance metric. Examples of performance metrics often include:
- Customer acquisition cost (CAC)
CAC is the cost incurred by the organization per customer they bring in. CAC is determined by dividing the combined marketing and sales costs by the number of new customers acquired during a specific period. CAC can help determine the ROI of sales and marketing strategies.
- Profitability
Profitability is an essential business performance metric. Businesses exist to make a profit through fulfilling a need. Profitability can be measured in many ways – gross, net, operating, etc.
- Productivity
Productivity can seem like a subjective metric – but it’s actually very measurable. It can also be measured in a variety of ways – but one common way to calculate productivity is the total output divided by the total input. For example, if an organization made $80,000 in 1500 hours, the productivity per hour is $53.
Sales performance metrics
- Activity
Sales activity metrics can provide insight the daily activity of salespeople. Sales activity metrics can be used as a catch-all term, because there are many different kinds of actions that count as sales activity. For example, a daily sales quota or minimum number of calls would both count as sales activity.
- Lead generation
Lead generation metrics provide information on the process of acquiring new sales. These metrics can help predict healthy or unhealthy pipeline status. Examples of sales performance metrics to track include average lead response time and percentage of follow-up.
- Sales productivity
Sales productivity is the rate at which a salesperson or team meets revenue goals. It is a conglomeration of metrics that include smaller actions such as time spent on selling activities and the average number of sales tools used during a period of time.
Project management performance metrics
- Gross margin
Gross margin refers to the difference between total cost of the project and the revenue it generates. A goal for gross margin is typically set at the beginning of a project and processes are focused on achieving that goal.
- Scope of work
Metrics that measure a project’s scope provide data that can help determine the timeline and budget needed to complete the project. This may include estimating the number of hours and employees necessary to complete the project and comparing that data to a previously completed project.
- Cost
Cost is a commonly tracked project management performance metric that can help determine unexpected variables. It is also an essential part of determining ROI, profitability, and more.
Employee performance metrics
- Rate of Employee Turnover
Employee turnover can be calculated by dividing the number of employees who left by the average number of total employees and then multiplying that number by 100. Employee turnover can be an important indicator of issues or events that are happening within your company culture – and it also has a serious impact on profitability overall.
- Employee Retention
Employee retention is like the inverse of employee turnover – employee retention is the rate of employees that stay. High employee retention indicates that employees are willing to stay within your organization and also has impacts on productivity, profitability, and more.
- Attendance
Tracking employee attendance is an important part of employee performance because it impacts other metrics such as productivity, efficiency, ROI, and others. It can also serve as a global indicator of culture within your organization. Attendance can also likely be tied to employee satisfaction.
There are lots of ways to use metrics to create your L&D ROI story – the trick is determining your goals and programs to reaching those goals. When you identify new business goals through examining business performance metrics, you can create custom training programs built to address those goals. Successful goals often lead to a more profitable business, creating growth and greater opportunities for everyone.
