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February 17

Calculate the return on investment (ROI) of your learning management system (LMS)

Training your employees is an investment, not an expense.

You invest in:

And more!

Obviously, there are financial benefits that flow from this investment. Therefore, we can assume that there is a measurable return on investment (ROI) on your corporate training.

Using a learning management system (LMS) such as Didacte in your organization can decrease your expenses and increase your profits.

Which will certainly have a positive effect on your ROI!

Outline of the article

  1. What to include in the calculation of the ROI of your LMS
  2. Case study: 2 examples
  3. Your turn

Reading time: 4 minutes

Calculate the ROI of your LMS

1. What to include in the calculation of the return on investment of your learning management system

You must first know your costs (expenses) and your benefits (income and savings) to calculate the ROI. 

To calculate the costs, you must consider the price of your training platform, the time invested by your team to digitize existing content and the time to create new courses.

For the calculation of benefits, there are several measurable examples to calculate the return on investment of your corporate training. Here are a few examples:

Increase of the…

  • company's performance by gaining employee skills (dollar/invoice, LTV, error rate, etc.)
  • value of your business following the standardization and documentation of internal expertise
  • revenue due to better dissemination of knowledge and customer service (NPS)
  • speed at which new skills are put into practice (e.g. sales, customer service, business partners, etc.)

Reduction in…

  • administrative costs for training management 
  • travel costs and equipment rental/installation
  • costs hardware and maintenance (cloud-based LMS)
  • costs associated with employee turnover
  • risk of fines associated with regulatory standards

The following examples provide a high-level overview of ROI calculations and include only traditional factors.

When you consider the invariable gains listed above, you quickly realize that the benefits of an internal training platform are more than significant!

2. Case study: fictitious calculation of the return on investment of your online training platform

Case study #1 - Health and safety standards

You have 200 employees to train on the new occupational health and safety standards. 

You plan to organize 10 sessions, bringing together 20 people at a time. 

The classroom course is given in a full day (8 hours). 

Its online equivalence can be given in 4 hours.

Details of associated costs (face-to-face vs online): 

  • Employee salaries*: $40,000 vs $20,000
  • Training development: $1,500 vs $5,000
  • Trainer fees: $3,000 vs $0
  • Equipment and room rental: $1,000 vs $0

Total: $45,500 vs $25,000

Net savings of $20,500, or 45% thanks to online training.

* Hours x hourly wages x days of training

Case study #2 - Welcome and integration of employees

You have an average of 50 hires per year. 

Your onboarding process is spread over a full day, i.e. 8 hours. 

Its online equivalence can be given in 3h30, before the first day in the workplace. 

Details of associated costs (face-to-face vs online): 

  • Employee salaries: $6,000 vs $2,625
  • Training development: $1,500 vs $3,000
  • Trainer fees: $5,000 vs $0
  • Equipment and room rental : $500 vs $0

Total: $13,000 vs $6,625

Net savings of $6,375, or 51% the first year. The savings will then climb to 79.81% since the development costs were reimbursed in the first year.

3. Your turn!

Although these case studies are fictitious, they represent the reality of companies using a learning management system.

Above all, it is not uncommon to launch more than one project on your LMS! Besides, there are many ways to make your LMS profitable even faster.

You could already spread the cost of your platform over several departments of your company by creating various internal projects (onboarding, corporate training, customer service, leadership, etc.).

You already have annual training budgets? 

Use our optimization calculation tool to find out how much you could save or reinvest in your business using Didacte!

Simplify corporate training management for your team!

Start a free 30-day trial of Didacte.

Create my LMS

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Mathieu Dumont

Mathieu Dumont is President and shareholder at Didacte. He is a fan of proper team management and good entrepreneurial practices. He is convinced that human resources are essential in the organizational development of SMBs.