What is a Learning Management System?
A learning management system (LMS) delivers and tracks educational and training content. It's used by companies to onboard and train employees and by educational organizations to teach students. E-learning tools include customizable content, mobile lessons and gamification. LMS solutions can improve employee engagement and retention.
The global LMS market is expected to grow to
$22.2 billion by 2023
Source: Marketsandmarkets
68% of workers say training and development is the most important company benefit.
Source: Guthrie Jensen
Companies that offer professional development opportunities have a 38% higher retention rate.
Source: Better Buys
POPULAR LMS TOOLS
Common LMS Features
Here are several common features found in LMS software:
Learning management
Learning management helps users organize and automate education and training. It includes tools for managing user info, scheduling, alerts, messages and delivering content. Administrators can also set prerequisites for training and allow users to self-enroll into specific courses.
Content library
Many LMS solutions include an out-of-the-box content library with premade learning materials. The library may cover a variety of topics, such as safety regulations, customer service and management techniques.
SCORM compliance
Shareable Content Object Reference Model, or SCORM, is an industry standard that allows learning management systems to incorporate third-party content without any duplication or recoding.
Synchronous learning
Synchronous learning requires students to learn at specific times, either online or in a physical classroom, which can foster collaboration between employees. However, it can be difficult to coordinate and schedule synchronous learning.
Gamification
Also known as game-based learning, gamification provides incentives for students to stay engaged by offering points, badges and other achievements. Students are motivated by competition, entertainment and the casual nature of games.
Certification and compliance management
Some industries or specific jobs require employee certification or compliance training. This feature manages and tracks whether employees have completed all requirements and can generate reports for auditing.
Content development
Organizations can develop personalized course content, either using templates or from scratch. Course authoring tools let administrators design courses with multimedia, such as videos, PDFs, infographics, animations and PowerPoint presentations.
Employee training
Some LMS solutions offer employee training courses. These courses often cover onboarding and job training or offer instruction needed for industry-required certifications.
Asynchronous learning
Asynchronous learning lets students access course materials at different times and locations. The main benefit is that users can learn at their own convenience. Because users aren't bound to a class schedule, organizations often set deadlines to motivate users to complete courses.
Mobile learning
Mobile learning gives students access to LMS materials through a mobile app or web browser. This feature allows remote and asynchronous learners to complete courses on the go.
Testing and assessments
Tests, assessments and quizzes see whether individual students have retained what they learned. They can be given after each lesson or at the end of the course. Analytical tools can identify proficiencies and learning gaps.
Performance tracking
Performance-tracking and reporting functions help determine if the overall learning program is effective. Organizations can analyze how users have performed in their courses and how much time they spend learning.
Top Benefits of LMS Software
Learning management systems have many benefits, including:
Reduced training time and costs
Training employees takes a lot of time, from preparing course materials to assessing performance. Learning management systems automate and streamline the process, which reduces training time.
Employers who don't want to build their own content can also take advantage of the premade course library that comes with many LMS solutions. And asynchronous classes can eliminate the expense of hiring an instructor and renting a physical classroom.
Increased employee engagement and retention
Studies show engaged employees stay with companies longer, and engagement begins with a structured onboarding program.
A learning management system can provide educational materials to help new hires get acclimated to a company's culture and the responsibilities of their role.
It can also improve retention by providing employees with professional development opportunities, including management training or skills to move up higher in the company.
Improved user learning
Most LMS solutions are designed using best teaching practices, including microlearning, multimedia, pre- and post-training assessments, convenient access and individual learning paths.
As part of an employee training program, the software can help users learn efficiently and effectively, compared to lessons prepared by managers with no teaching background.
Ability to track certifications and compliance
Some industries or jobs require certifications or continuing education credits. LMS solutions can help administrators track which employees need additional credits or certification renewals.
Administrators can also generate reports to demonstrate that all employees have completed training needed for regulatory compliance.
Types of LMS Buyers
LMS buyers generally fall into one of the following categories:
Large and enterprise-level companies
Large companies have many employees who need onboarding and continuing education. Although these businesses can afford to hold physical classes, they can still benefit from LMS solutions that provide on-demand lessons for busy workers and track course completion for regulatory compliance.
Large companies may also have some learning functionality through their human resource management system (HRMS), but can still decide to purchase a best-of-breed LMS solution for course development or advanced functionality.
Small and medium-sized businesses (SMBs)
SMBs typically don't have the budget or staff to administer proper training, which can require costly and time-consuming tasks like developing course content, hiring instructors and keeping track of compliance training.
These companies may benefit significantly from LMS solutions that come with a premade course library and can organize employee training and certifications. In addition, many LMS vendors offer low-cost options for companies with a few employees or even a free basic version of their software.
Educational organizations
LMS solutions are popular with educational organizations, such as colleges and universities, because students can access course materials and communicate with the professor and their peers outside of class.
In the last decade, LMS vendors have also started to target elementary and secondary schools. Similar to higher education, K-12 teachers typically use the software to supplement in-class teaching. For example, they can assign courses or quizzes for students to complete at home.
LMS Pricing
LMS solutions often use a software-as-a-service (SaaS) pricing model, which means that businesses pay only for their software usage. Some LMS vendors also have options to purchase a one-time license fee or use a free version of the software.
These are the common LMS pricing options:
Per learner,
per month
The company pays for the solution based on the number of learners actively enrolled in training per month. Fees are generally $5 or less per learner, per month. Note that there may be a set-up or installation fee.
Per learner,
per use
This option allows companies to pay only for the features or modules they really need. Prices are between $1 to $10 per learner, per use.
Per course
This plan is intended for industries with employees who need to renew their certifications or adhere to regulatory compliance. The price is based on the specific certification or continuing education credits needed.
Free
Open-source LMS solutions are usually free and customizable. However, they can be complicated for companies that haven’t used an LMS before, and there’s no support if something goes wrong. Some LMS vendors also offer free basic versions of their software for a limited number of users.
One-time license fee
Companies can purchase a license to install the software on-premise. This option is best for businesses with their own IT staff and data center. License fees generally range from $500 to $20,000, and setup can cost over $25,000.
How to Choose LMS Software
LMS solutions can range in features and pricing, so it's important to take the time to research your options. We recommend the following steps when choosing an LMS solution:
Identify your company's needs
The first step in identifying your needs is to get input from potential users. Which workers will receive the most training? Will an LMS solution primarily be used to onboard new hires, train factory workers on safety or provide management classes to employees?
Many LMS solutions also come with course libraries. Check to see if the premade content includes relevant topics to your business. If not, does the software include course development tools? And does your business have the time and energy needed to create custom learning materials? If you need help figuring out the answers to these questions, we've written about how to choose what LMS content your workforce needs.
You should also figure out which key performance indicators (KPIs) will be affected by an LMS solution. Will it increase productivity? Can it reduce training costs? Gathering this info can help you make a business case for investing in an LMS solution and get buy-in from executive management.
Creating a shortlist
Research vendors that best fit your needs. In addition to current requirements, consider the implementation process and the scalability of the LMS solution.
The implementation process can vary from solution to solution. You'll want to speak with vendors and request details on timelines and fees. Does the vendor offer training? If so, will it conduct on-site sessions?
Also, check if the LMS solution can integrate with the HR software your company currently uses. If you can pull employee information from an HRMS or use a single sign-on for both platforms, it can save administrators and users a lot of time.
Think about how many workers will need to use the LMS solution now and in the future. If you plan to grow the company, make sure the learning management system is scalable. It should be able to hold a large amount of content that can be edited over time.
Once you've researched these areas, you can put together a shortlist of vendors whose offerings match your needs.
Get customer references
Once you've completed a demo of the LMS solution and have a better understanding of price and services, you'll want to get references from a vendor's existing or previous clients.
The vendor will give you the names of clients with positive experiences, but ask for companies that have similar needs to yours (e.g., businesses with under 50 employees or companies that need employee certifications).
When contacting the reference, ask if there have been any issues with the vendor or the solution. Also, if the vendor has been in business for less than five years, it's particularly important to get references.
Conduct due diligence
Be sure to compare not only different price quotes, but also deployment options, implementation times and customer support.
Once you've narrowed down the list of vendors, request referrals from customers in your industry or that are a similar size to you. Find out if there are any issues with the vendor or the software.
Challenges of LMS Software
Every software has its pros and cons. Implementing and using an LMS solution has its own challenges, including:
Unclear learning objectives
It can be difficult to define exactly what a business or educational organization wants to get out of an LMS solution. Of course, it should help users learn better, but how do you measure that?
Does your organization want higher test scores or better rates of completion? For companies, is success a safer working environment, more sales or higher employee engagement?
Listing out specific learning objectives is an important part of selecting an LMS solution and understanding how it will be used.
Lack of stakeholder buy-in
Top leaders need to be on board with any development program. But they may not see a need for a learning management system unless the business case is presented to them. Companies may need to develop clear KPIs and evaluate the potential return on investment to get executive buy-in.
Also, if training typically falls to HR, they may have concerns about whether they can trust an LMS for compliance. Department managers might worry about using existing content or having to build courses from scratch. And IT will need to support the decision, as they’re responsible for day-to-day maintenance of the software.
It’s key to address these stakeholder concerns during the initial stages of implementation.
Issues with implementation
Similar to other software, issues can come up during the implementation process for learning management systems. For example, implementation may take longer than anticipated.
Better Buys has talked with implementation experts who said that communication issues can derail the process. It’s important to maintain an open dialogue between the software vendor and key decision makers and end users throughout all stages.
For more help with the process, check out our guide to LMS implementation.
LMS module included with HRMS solution
Some companies might have an HRMS solution with a built-in LMS module with fewer features than a dedicated LMS solution. Deciding between using an LMS module or separate software poses several issues.
How much does a dedicated LMS solution cost, and will the additional benefits outweigh the expense? Can the LMS software be integrated with the company’s current HR software? Will IT find it too difficult to maintain a separate solution?
Answering these questions will be a necessary step before making a final decision.
Market Trends
Like similar software markets, the LMS market experiences changes in trends. Here are a few key trends:
Artificial intelligence (AI) will support adaptive, personalized learning
LMS solutions that use AI can create adaptive, personalized learning that typically requires a human teacher. The software can evaluate an LMS user's understanding of a concept and adjust course content accordingly.
If a user learns quickly, the software can skip practice lessons and suggest advanced topics. If a user is having difficulty with written materials, the LMS can shift to video content.
Businesses can take advantage of AI-backed LMS solutions to offer custom and cost-effective education to many employees at the same time.
Course content shifts to microlearning
As the number of millennials in the workforce rises, learning styles have also changed. Businesses are more reluctant to commit to a 90-minute course or a 50-page case study. Instead, they're shifting to microlearning, which features shorter, more focused content.
Many LMS solutions now offer learning materials in small, digestible chunks. These microlearning lessons are convenient for students with tight schedules and user-friendly for mobile app users.
Social learning promotes employee engagement and collaboration
In the past, many LMS solutions focused on individual learning. However, social media has changed businesses and employees' lives, making them more connected.
LMS solutions are taking note, and some vendors now offer social learning tools. Users can create profiles on corporate social networks, post training-related materials and discuss learning issues in forums.
Social learning not only improves training, but can also increase employee engagement and collaboration. These tools can create a digital community that supports and motivates learners.
