The ROI for the Training Arcade®
With the Learning & Development industry focused on return on investment (ROI), we at The Game Agency decided to try and put our arms around the math. While it’s indisputable that an investment in employee training will lead to improvements in productivity and company profits, there is not much consensus on how much each dollar invested in training will yield in additional dollars to the bottomline.
There is more consensus, though, on the direct correlation between the kind of training deployed and information retention and retrieval rates for employees. When training is more intellectually and emotionally engaging (i.e. more active), it leads to better employee retention rates. When employees can retrieve this information at the moment they need it, they can more effectively perform their jobs.
Retention Rates by Learning Situations
Industry Data Points:For example, The National Learning Laboratory (NTL) found that retention rates increase as learning becomes more active:
- 5% for instructor led training (lectures)
- 10% for reading (presentations)
- 20% for audio/video eLearning
- 75% to 90% with “practice by doing” through real-life application and active learning such as with games and game simulations
The Formula for the ROI
- a 500 person company
- average cost of training is $1,299 per employee per year (based on average listed in an ATD study from 2018)
- to be conservative, we’ll use the high end of retention rates of 20% realized with traditional passive learning
- to continue the conservative analysis, we’ll use the retention rate improvement of 75% when pairing the traditional techniques with the more active modalities in The Training Arcade®
- Amount typically invested for 500 employees = 500 x $1,299 = $649,500/year
- Memory attrition from traditional passive learning = 80% x $649,500 = $519,600/year
- If all 500 employees played training games with all their training, the memory attrition of traditional training paired with the active learning in games = 25% x $649,500 = $162,375
- The training investment saved by the active learning = $519,600 – $162,375 = $357,225 savings per year = $978 savings/day
- To be even a bit more conservative, let’s assume that only 25% of the traditional training was paired with training games, The Training Arcade® 9 game bundle would pay for itself in approximately 25 business days
- $5,999 / $978 / 25% =~ 25 business days
Disclaimer: these ROI results are based on publicly available data and mathematical assumptions. The results are directional in nature only, and individual company performance improvement will vary depending on the manner in which the gamified training is implemented. The results are not predictors of future success and are in no way guaranteed.
- “The Learning Pyramid.” Retrieved from https://www.educationcorner.com/the-learning-pyramid.html
- Silverman, R.E. (2012, Oct. 26). So Much Training, So Little to Show For It. Retrieved from https://www.wsj.com/articles/SB10001424052970204425904578072950518558328
- Ho, M. (2019, December). Learning by the Numbers. Retrieved from https://www.td.org/magazines/td-magazine/learning-by-the-numbers