Study: High-Impact Learning Functions Tied to Higher Revenues

By Gerry Kranz

Companies with high-impact learning functions outperform their competition by a wide margin, a recent study shows.

The research, produced by Oakland, California-based research firm Bersin & Associates, says companies with a sophisticated approach to employee development averaged three times higher revenue growth from 2008 to 2011.

High-performance learning organizations also are eight times more likely to be viewed as strategically valuable by executives and three times more likely to align learning-and-development initiatives with overarching corporate goals, according to the study.

Bersin & Associates defines high-performance learning organizations, referred to as “HILOs,” as those that excel at building organizationwide capabilities that drive business growth. Released in August, the report includes findings based on Bersin’s analysis of the learning function at nearly 300 organizations.

Having an effectively trained workforce is one of the most pressing challenges facing companies, says David Mallon, a vice president at Bersin & Associates and co-author of the report. They are squeezed between two economic realities: Companies need to develop a lean, high-performing workforce while they shave operating expenses and break into new markets.

“We know

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that, for whatever reason, some training departments do a better job of moving the needle than others. This research tries to establish what they do that results in positive, measurable change for their companies,” Mallon says.

However, simply ramping

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up new training programs won’t necessarily enable an organization to dramatically improve its financial performance, Mallon says. In fact, high-performing companies have shifted from employee training to a broader focus on building organizational capability, which encompasses training as well as other factors that affect the learning function.

Now in its third year, Bersin’s study examines 15 different aspects of corporate learning departments, ranging from organizational structure, staffing levels, program design, governance and others.

Among those various elements, three common traits are shared by high-performance learning organizations, Mallon says.

First, they use sophisticated techniques to measure and evaluate learning. Second, they focus less on training and more on creating an organizationwide “culture of learning.” Lastly, they have well-developed strategies to create, harness and organize an increasing volume of learning content.

Those three factors usually are the strongest predictors of success of learning organizations, Mallon says.

The best organizations, in fact, place lots of stock in the notion of measurement of learning.

Global banking firm Credit Suisse Group has connected the dots to demonstrate that career development boosts retention of top performers, leading to higher customer satisfaction and stronger financial performance, Mallon says. “They can string together those variables in a way that proves how career learning ultimately affects Credit Suisse’s profitability.”

Other factors are crucial, too, such as how a learning organization is structured, its use of learning technologies or the presence of a chief learning officer. Those items help set the stage, but usually aren’t huge differentiators for companies, Mallon says. “They get companies to a certain plateau, but to get beyond that plateau, they need to master things like measurement, content, culture, performance consulting and so on.”

Bersin announced the results in tandem with its HILO Maturity Model, a trademarked assessment tool. The model helps organizations evaluate the effectiveness of their learning function based on objective measures, and provides a road map for making improvements.

About the Author:

Garry Kranz is a Workforce contributing editor. Reprinted from Workforce Management

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