New research on the ROI of learning from Udemy for Business | Culture Amp

Learning & Development (L&D) is one of the levers employers can use to attract and keep employees engaged in today’s tight labor market. Analysts predict that the largest increase in total rewards over the next three to five years will be in career development. At the same time, L&D has proven to be an area where companies routinely fall short: 68% of employees have changed jobs due to a lack of learning and development opportunities.

Many companies feel pressure to invest in L&D opportunities while also measuring and tracking the return on investment. That’s why Udemy for Business surveyed L&D and HR leaders to better understand how organizations are proving the ROI of learning and how learning impacts key business outcomes like employee engagement, productivity, tenure, retention, and revenue growth. We’ll share some of the highlights in this blog post. Or if you prefer, you can read the full State of the ROI of Learning Report here.

A strong connection between engagement and learning

Employee engagement is a top concern for most employers since it’s been linked to better retention, performance, and even higher share prices. Our research demonstrated a strong connection between engagement and learning.

We found a connection between the amount companies spend on learning and how engaged their employees are. More high-engagement companies spent in the higher average price range of $2000–$2500 per employee annually on learning. 30% of high engagement companies spent an average of $2000+ per employee annually. In contrast, only 7% of low-engagement companies spent $2000+ per employee.

We also discovered that employees at high-engagement companies spend more time learning than people at low-engagement companies. 52% of high-engagement companies have employees who spend an average of 31–50 hours of learning per year compared to only 20% of low-engagement companies. However, there was an optimal amount of learning between 31–50 hours. After 50–70+ hours, the impact of learning on engagement tapered off. Check out our ROI of learning infographic.

To create a learning culture, it’s essential to give employees time to focus on their development, so they can stay up-to-date with the latest technical and soft skills. But at the same time, they still need time to focus on the day-to-day duties and responsibilities their job demands. This explains why the sweet spot of high engagement and high learning falls around 31–50 hours per year.

It’s clear organizations that care about their employees’ long-term growth and invest in learning & development enjoy a more engaged workforce. By offering a wide variety of on-demand online courses—from technical and leadership skills to personal development—employers can help keep employees engaged on the job.

The role of online learning

We were also curious to see how online learning affects L&D initiatives. Most companies surveyed had added online learning within the past three years. The majority of the companies offered either blended online/offline learning (58%) or online learning only (28%). The smallest percentage, 15%, offered offline or classroom learning only.

Online learning is often highly personalized, which means it’s easy to tie in with each employee’s individual goals. Plus, due to its easily “snackable” nature, online courses often provide opportunities for just-in-time learning, allowing employees to learn exactly what they need in the moment they need it. Our survey found that 67% of companies using online learning only observed higher productivity or faster onboarding time.

Online learning was also linked to employee engagement—after adding online learning, 64% of companies said average employee satisfaction and engagement rate increased.

Online learning can boost learning engagement too. After adding online learning, 64% of respondents said the average number of hours of learning per employee increased overall. For example, when TBC—a retail tire company—introduced online learning for the first time, they went from a handful of learners to 85% learning engagement in just a few months.

No strong link between tenure & retention and learning

It seems like there should be a link between employee tenure and learning, but our research didn’t confirm this. In particular, we analyzed whether the number of learning hours or L&D spend had an impact on retention, and we found it didn’t. The likely reason is that L&D benefits can’t be offered in isolation without actual growth opportunities at companies. In order for companies to keep their employees longer, they will also have to offer new roles for employees to grow into, both horizontally and vertically. Simply offering learning resources alone isn’t enough to keep people around.

Get more data insights in our latest State of the ROI of Learning Report. Download your copy here.