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)[1] 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

However, without active follow-up and assessment, 90% of the skills employees learn[2] through training are lost within a year.

5%

Instructor led Training/Lectures

10%

Reading

20%

Audio/video eLearning

75%-90%

75% to 90%

with active learning like games and game simulations

The Formula for the ROI

$1,299

Average Cost of Training Per Employee with a workforce of 500 or more

$1,299 x 500

= $649,500

Annual total cost for the 500 employees

- $519,600

Money lost to memory attrition from passive learning

80% x $649,500

= $519,600

Cost of lost memory to passive learning

+ $162,375

Saved by pairing active learning with traditional

25% x $649.500

= $162,375

If all 500 employees played training games with traditional training

+ $357,225

Saves per yr, or $978 everyday

$519,600
- $162,375

= $357,225

savings per yr. if all employees use gamified andd traditional training

25

Days to pay for the annual subscription

25 The number of days

A The Training Arcade® 9 game bundle would pay for itself.

Example Data:

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)[3]
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^®

The Math: Based on the example data above, let’s look at how long it might take to pay off a $5,999 investment in the 9 game bundle subscription to 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

The payback time of course increases the fewer the games used. Hence, use more of the active learning in training games!

Footnotes

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

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Arcades™ a Game Destination from The Training Arcade^®

500 75%

For Active Learning