A business that invests in its employee’s growth and development is bound to succeed.
Let me give you some context.
45% of employees would stay with a company long-term if it invests in their development. Not only that but organizations with effective training programs witness 24% higher profit margins than those without.
The benefits of comprehensive learning for employees are so clear, and that’s where learning management systems become invaluable.
What is a Learning Management System (LMS)?
A learning management system is a software platform for creating, managing, and distributing online learning content.
Talent LMS is one decent example.
The system has a backend where instructors or administrators create and publish the content. It provides tools that allow instructors to focus on authoring the content and tracking student performance.
Meanwhile, the system’s front end has an intuitive interface that lets students enroll and consume the content. Some systems even go as far as allowing students to interact with each other through discussion forums.
Learning management systems are used by various organizations, from learning institutions to government agencies and private businesses. These organizations can use the systems to achieve different goals.
For example, learning institutions can use them to deliver online learning classes, government agencies can use them to train employees, and private businesses can provide online courses to upskill their workforces.
Benefits of an LMS
So, why should your business invest in a learning management system?
Here is why you should get an LMS to deliver learning content:
- Saves Time
A learning management system can save you so much time when training your employees. The best online course builders provide extensive tools, allowing you to focus on creating the educational content rather than the technicalities of delivering it.
A learning management system also saves your company time by allowing the students (your employees) to take the courses at their own pace and time. This allows you to deliver crucial content without significantly impacting working hours.
Plus, it’s more efficient than traditional face-to-face learning, which is less flexible.
- Reduces Costs
Implementing an LMS is much cheaper than in-person training. Can you imagine how much it would cost to conduct onboarding or continuous upskilling training with each employee?
An LMS digitizes learning materials, allowing you to reuse them with new employees. It also eliminates certain expenses altogether, like booking learning venues and the administrative costs of doing in-person training.
This means you can meet employee’s need for continuous learning and development without adding massive line items to your annual budget.
- Easy, Centralized System
An LMS provides a centralized system for hosting all training or learning materials. This is super convenient as it allows administrators and tutors to track what content is being delivered and its impact on employees.
That’s crucial, especially for bigger corporations with dozens of employee training and learning programs.
Employees will also have a better learning experience because they can access all learning programs from one platform instead of jumping between apps.
- Personalized eLearning Experience
One of the best things about the best learning management systems is they can deliver a personalized e-learning experience. These platforms help you tailor the learning process to suit every student’s preferences.
For example, each student can learn at their own pace. This can result in better performance for all students because you’re not using a one-size-fits-all approach.
Moreover, you can tailor an LMS to deliver specific courses based on the competency required for specific roles. For example, sales reps and customer service require different skills to do their job. You can use an LMS to create different learning journeys for each role.
Another technique is to tailor the learning path based on the employee’s interests or needs. For example, some employees may be in the sales department but be interested in other roles or skills. An LMS will give such employees access to the necessary learning materials that match their interests.
- In-depth Training Data
From experience, I can tell you that one of the biggest challenges you will face when implementing an LMS is demonstrating its ROI. Your supervisors must see how the system and the training benefit the organization to continue funding it.
The best LMS platforms provide rich data, such as the number of employees taking the courses, completion rates, and performance on tests or quizzes.
This makes it easier for you to track the engagement of each online course and training offered, as well as the progress of the employees taking those courses.
These insights will make it easier for you to demonstrate the impact of the LMS and your training programs. They should also help you monitor how employees perform to identify ones that may require additional assistance.
LMS Use Cases
Training employees is one of the obvious use cases of a learning management system, but it’s not the only one. Here are six ways you can use an LMS for optimal ROI.
- Onboarding and Training
69% of employees are likely to stick with a company for at least three years if they get a great onboarding experience.
Meanwhile, the cost of replacing an employee can be between one-half to four times their annual salary!
A great onboarding experience delivered through a good LMS can increase employee retention and save your company thousands of dollars annually.
This is particularly crucial in the modern workplace, where remote and hybrid employees are present. A good onboarding program delivered through an intuitive learning management system will ensure new employees get a smooth start into their new roles and quickly adopt your company culture.
- Training and Upskilling
An LMS can also help you with upskilling your employees. As tech evolves, so do most roles. This results in a constant demand for training to help employees adopt and use the latest technologies.
Most recently, we’ve seen how different roles have evolved to accommodate AI. An LMS will help you create and distribute training content to ensure your employees (and the company at large) can take advantage of the latest technologies to remain competitive.
- Soft Skill Training
Soft skills are essential in the modern workplace. A learning management system can be used to create various courses targeting different soft skills.
And since LMS can deliver personalized training, employees can choose courses that train them for the specific soft skills they struggle with.
- Compliance Training
Some industries require mandatory employee training on particular issues. For example, healthcare workers are required to undertake HIPAA training.
An LMS allows you to deliver such training and maintain a record showing your employees actually completed the training. This is vital in mitigating company liability should something happen in the future.
- Customer Training
An LMS is not useful for internal use alone. It can also be used to train and educate your customers, which is particularly useful in the SaaS industry.
For example, you can create online courses related to your product or service offering. This helps in educating the customer while promoting your product. This is what brands like Salesforce do.
Great learning content could even become an important part of your customer acquisition and retention strategy.
- Partner Training
Finally, you can use an LMS to train business partners. This can help you train partners on how to use and position your product alongside their own offerings.
It results in better business partnerships.
Check this out:
Zappier provides comprehensive training products to help other businesses that integrate with its tools. The courses help Zappier’s business partners understand Zappier’s key features and how to leverage them. In the process, they enhance their product offerings with a more effective Zappier integration.
Types of LMS
A learning management system is a general term for platforms that facilitate online learning. However, you will find different types of LMS tailored for specific functions:
- Academic LMS
Academic LMS are primarily designed for learning or educational institutions like colleges and universities. They focus more on student enrollment, course management, and grading.
This is an ideal option for a professional course creator or learning institution. Businesses will likely see better results with a corporate LMS.
- Corporate LMS
A corporate LMS is tailored for businesses and emphasizes employee training and development. It supports compliance tracking, performance management, and reporting tools.
These systems may also integrate with other business tools, such as Human Resource Information Systems and Customer Relationship Management software.
- Hosted LMS
A hosted LMS is set up within your organization’s servers. That means your organization will have complete control over the system. The drawback is that these systems cost more since you’ll need dedicated servers and IT professionals.
Hosted LMS is less common than cloud LMS but may be necessary for industries with strict compliance regulations to safeguard sensitive data.
- Cloud LMS
A cloud LMS is usually hosted on the cloud and can be accessed through the Internet. Most modern software applications are hosted this way. A cloud LMS is more convenient and can be cheaper than a hosted LMS.
The server and maintenance duties remain with the provider, for which you pay a monthly/annual subscription fee. Also, students can easily access these systems remotely.
- Third-Party LMS
In this case, businesses use a third-party organization to deliver a custom LMS system tailored to their needs.
Your business provides the data and use cases you’re interested in, and the third-party organization uses this to deliver a custom cloud-hosted LMS.
This system gives you access to a custom LMS without building your own infrastructure from the ground up.
- Desktop LMS
A desktop LMS is primarily accessed through a desktop device like a laptop or PC. Still, some of these LMSes can be accessed through mobile devices.
- Mobile LMS
A mobile LMS is accessed through mobile devices like smartphones or tablets. These can be more convenient since they support mobile learning, meaning students can access the learning materials while on the go.
How to Calculate LMS ROI?
Calculating the ROI of your LMS and training can be complicated. However, the best way to demonstrate the return on investment is to link the training to a specific business objective.
The objective can be to increase customer acquisition, the average order value, or customer lifetime value.
So, let’s say you ran a training program to help employees increase the average customer order. You then attribute the training to a $15,000 increase in total average order value within a particular duration.
With this figure, use the (training benefit – training cost)/ training cost X 100% formula to get your ROI.
For the training cost, include the time spent on training + time spent creating training resources + the cost of your LMS system.
So, for time spent on training, look at the employee’s hourly wage and multiply that by the number of hours spent on training. This should give you the expense incurred.
For example: $30 X 8 hours of training.
Similarly, multiply the time spent creating training resources by the trainer’s hourly wage to get the cost of making the training.
You’ll notice that your costs will go down with time as more employees take the course (or you create more courses) and the training benefits increase. This means a higher ROI.
Conclusion
A Learning Management System (LMS) is a transformative tool for enhancing employee training and development initiatives. These systems provide a centralized learning platform, save time and money, and can deliver personalized learning experiences.
Use them to enhance your onboarding experience and provide training and upskilling opportunities to your employees. This should help you create a happy workforce, retain more employees, and improve your overall business performance.
Author Bio
Baidhurya Mani is the founder of Sell Courses Online. He regularly shares tips, tools, and strategies to help creators and entrepreneurs build a successful online course business.
