A learning management system (LMS) is a software that makes it easy to organize, manage, and deliver your small business’ training content. Also commonly referred to as a training management system or learning experience platform, an LMS streamlines the administration of employee-specific and company-wide training while tracking employee progress, performance, and satisfaction. This makes it an excellent solution for businesses in highly regulated industries and companies that prioritize employee training and growth.
Keep reading to learn more about what a learning management system is and how it works, as well as if it’s what you need at this point for your business.
How Do Learning Management Systems Work?
An LMS stores all of your corporate training programs, online learning materials, and training-related information. To access the system, users are provided with the applicable login credentials. Most learning management systems come with user permissions, allowing system administrators to control who has access to specific features and training modules.
Once training is underway, administrators can monitor each employee and look at completion rates, progress (through training requirements), and performance (through online assessments). This data can be analyzed within the LMS or synced with a human resources information system (HRIS) or other talent management tools to draw correlations between training and employee satisfaction, advancement, and attrition.
LMS Software Implementation Options
In terms of software implementation, an LMS can be a cloud-based software or installed directly into computers. You can also install it on your company’s servers as a self-hosted solution. If you’re using an HRIS that supports third-party software integrations, you can connect an LMS to that platform. Click through the tabs below to learn more about these options as well as their advantages and disadvantages.
Cloud-based LMSes are hosted on the internet and accessed by logging in to a web portal that houses all of a business’ training materials. No software download is required, making it an excellent format for businesses that rely on remote training sessions.
This provides an efficient way for organizations to manage their courses, messages, and content across multiple devices, allowing users to access learning resources anytime, anywhere. Additionally, cloud-based LMSes are cost-effective and ideal for small businesses and organizations that need to scale quickly.
Advantage: Easily scalable and accessible from anywhere with an internet connection.
Disadvantage: Requires a reliable internet connection, which can be a problem in areas with poor connectivity.
This is a mobile-first learning management system, which can be accessed via tablets or smartphones. Training can be uploaded so learners can access course materials, participate in activities, and track progress on the go. These types of LMS often have features like push notifications, offline access, and responsive design to ensure seamless learning experiences across various devices.
Advantage: Allows learners to access courses and materials anywhere, which can improve flexibility and engagement
Disadvantage: May have limited features compared to web-based or desktop LMS platforms.
This option requires a learning management system to be loaded directly into a computer. Unlike cloud-based software, where you can access your training from anywhere, this will require employees to log in to one dedicated device. While it allows for more control and security than cloud-based platforms, this could potentially slow training.
Advantage: Users can control when and how updates are applied, ensuring stability.
Disadvantage: Requires significant local resources for installation and maintenance.
Self-hosted LMSes are installed on your company’s servers. This is great for those with an in-house IT team that can help maintain the system and install software updates.
Some self-hosted LMSes even come with customization options. System administrators—like a business’ HR team—can upload educational resources, create and administer quizzes and other assessments, and track the progress of individual learners or the team as a whole. Many LMSes streamline this process through automated notifications to keep employees on track.
Advantage: Offers extensive customization options and full control over data security and privacy.
Disadvantage: The organization handles all aspects of maintenance, updates, and security.
If your business relies on an HRIS to manage its HR needs, integrating it with an LMS can improve data syncing and streamline reporting. Not only can an LMS-HRIS integration make it easier to track employee progress, but it can also simplify the onboarding process and reduce discrepancies and the amount of time spent entering data.
Having all of your business’ HR and training data in one place can also help your team spot relationships between training and other important metrics like employee productivity, engagement, satisfaction, and turnover.
Advantage: Provides a unified system for managing employee learning and HR processes, enhancing efficiency.
Disadvantage: Can be complex to implement and manage, requiring significant upfront planning and integration efforts.
LMS Pricing Models
There are several payment models for LMS, catering to different needs and preferences. Here are some common types:
- One-time license fee: Users pay a single upfront fee to purchase a perpetual license for the LMS software. This model typically includes access to updates and support for a limited period. LMS systems that offer this payment model require you to talk to a sales representative, but they could cost you up to $25,000.
- Subscription-based: Users pay a recurring subscription fee, usually on a monthly or annual basis, to access the LMS. This model often includes updates, support, and sometimes additional services such as hosting. The price range for this model is between $100 to over $1,000 per year for a basic plan.
- Pay per user: In this model, users are charged based on the number of active users accessing the LMS within a specified period. This allows for flexibility as organizations can scale up or down according to their needs. This pricing model can be as low as a few dollars (around $5) per user per month or a set amount monthly for a set maximum number of employees (ex. $299 monthly for 1 to 25 employees, then $349 monthly for 26 to 50 employees).
- Freemium: Here, the basic version of the LMS is offered for free, with limited features and functionality. Users can then opt to pay for premium features or upgrades.
- Custom pricing: Some LMS vendors offer custom pricing based on factors such as the number of users, specific features required, or the level of support needed. This model allows for tailored pricing based on the unique needs of the organization.
- Open source: While not a traditional payment model, open-source LMS platforms are freely available for anyone to use, modify, and distribute. Organizations may incur costs related to customization, hosting, and support.
Benefits and Challenges of Using an LMS
An LMS is a great tool for training and development. Aside from streamlining the administration of training programs, below are more benefits of an LMS. We also listed some of the challenges around it as well.
Who Is an LMS Best For?
In the business context, an LMS is generally aimed at simplifying training. While any organization providing learning courses can use an LMS, there are certain businesses that will benefit more from the technology than others, such as those:
- Operating in industries that require regular training and certification renewal
- Requiring employees to participate in online corporate training videos during onboarding and beyond
- Relying on a remote workforce that needs access to e-learning sessions
- Providing training products to customers, especially via client-specific login credentials
Top LMS Features to Look For
So, what should you look for in an LMS? The best LMS for your business depends on several factors, like budget, number of employees, and whether you’re in a highly regulated industry. However, there are several more common features to consider when choosing a platform, such as the ones listed below.
An easy-to-use centralized learning hub provides your HR team and other employees quick and convenient access to training materials. This not only enhances the learning process but also reduces the frustration associated with training and certification requirements.
Look for an LMS that offers an enjoyable user experience for learners and a streamlined interface for those managing and tracking employee training.
If you’re offering training to team members in different departments—like engineering, marketing, and sales—you may want to provide a different learning environment for each. In this case, look for an LMS that lets you personalize the training experience by curating relevant coursework for each employee or department.
Depending on the type of training you plan to offer, you may want an LMS that features adaptive assessments and quizzes that automatically adjust based on a learner’s mastery of the materials.
Security may not be the first thing that comes to mind when choosing an LMS, but it’s important to choose an option that will protect employee data and your business’ valuable proprietary information. For example, you can increase security by choosing a single-tenant LMS that can only be accessed by your team rather than a multi-tenant option that hosts multiple clients.
For businesses that rely on synchronous learning—rather than just asynchronous content, like slides or pre-recorded video—choose an LMS that offers smart scheduling. These tools make it easier to find times that work for large training groups and offer more flexible scheduling options that don’t interfere with employee productivity.
In addition to using adaptive assessments to tailor the user experience, many HR departments find value in advanced assessment tools for tracking employee progress. This can help your team measure everything, from learner engagement to comprehension and, ultimately, retention.
If assessments are an important element of your business’ training strategy, look for an LMS with options like quizzes, exams, simulations, and feedback mechanisms to help learners improve over time. Where appropriate, assessments can also help employees test out of lessons.
Ultimately, this may reduce the time employees spend in unnecessary courses—helping you identify the training content and learning tools that workers really need. This also improves productivity and reduces burnout or frustration stemming from excessive training.
One benefit of LMSes in business is that these programs let HR professionals track an employee’s progress through available training materials. Not only does this allow businesses to better understand the status and effectiveness of their training strategy, but it also makes it easy to spot patterns in employee behavior.
For example, using data available through an LMS may reveal that highly trained employees are more engaged and have a lower attrition rate. Likewise, you may find that employees who are not required to complete periodic training are less engaged and, therefore, more likely to leave the company.
If your business is in a regulated industry, look for an LMS that offers compliance tracking tools. These features make it easier to track individual knowledge, performance, and gaps while creating a compliance record that can be referenced in an audit.
For many business owners, reporting and analytics are among the most important features of an outstanding LMS. While your HR team may be able to administer training courses without too much effort, tracking who has completed and passed each training requirement can be more daunting.
Common reporting features include progress and completion rates, assessment results, participation and engagement, and time logs. Many businesses can also benefit from analytics that track learner satisfaction and course ratings. Consider how you plan to utilize an LMS and choose the most beneficial reporting tools based on those needs.
If you use an HRIS, talent management software, payroll service, or other platform to manage and administer your business’ HR strategy, look for an LMS that can integrate with those tools. Integrations make it easier to sync employee data and can significantly reduce the time spent entering and analyzing that information. Larger companies with the infrastructure to develop their own proprietary LMS can design custom LMS tools to integrate with current systems.
Automations and notifications can help both HR leadership and employees meet their training goals. By setting up course completion deadlines and training timelines, your business’s HR department can ensure employees are getting automated reminders when it’s time to meet specific training requirements.
These automations and notifications also make it easier for HR to monitor where each individual learner is in the training process—and identify who is falling behind or failing to meet compliance requirements. For training beyond your company’s minimum requirements, many LMS options can use algorithms to make additional course recommendations based on the user’s interests, role, and performance.
How to Choose an LMS
If you think your company may benefit from an LMS, take the time to find a platform that can be tailored to your industry and training needs. Follow these steps when choosing a platform.
- Evaluate your business needs: Before shopping for an LMS, identify how your business plans to use the platform. Will you administer and track monthly training requirements or just onboarding materials? Do you plan to integrate the LMS with another HR platform? What kind of data do you want to gather from the LMS? Do you need a cloud-based LMS that employees can access from home or in the field? What is your budget?
- Identify must-have LMS features: The ideal LMS varies by industry and individual business. If you’re in a highly regulated industry, focus on tools that will let you track requirements and generate reports in case of an audit. If you handle large amounts of sensitive information, choose an LMS that offers robust security features.
- Research LMS vendors: Once you identify your non-negotiables, start researching LMS vendors to determine which options are in your budget. Of those, compare available features and identify anywhere from three to five top contenders to evaluate more closely.
- Demo top providers: Ease of use is one of the most important things to consider when shopping for an LMS, so take the time to demo each platform you’re considering. Many companies offer a live chat option or demo request form through their websites, but if that isn’t available, reach out via phone or email to request more information.
Ensure that the system adheres to key regulations, such as:
- General Data Protection Regulation (GDPR) and Family Educational Rights and Privacy Act (FERPA ) to ensure data privacy and data security
- Conformance to Web Content Accessibility Guidelines (WCAG) to provide equal access for all users, including those with disabilities.
- Support for Sharable Content Object Reference Model (SCORM) and Experience API (xAPI) to facilitate the interoperability of e-learning content.
- Adherence to security standards like ISO/IEC 27001 for information security management
Top LMS Platforms
The best learning management systems offer something unique for each business, such as industry compliance, new hire training, and performance management. Choosing the right platform depends on the factors listed above. If you’re looking for an LMS, here are our recommended solutions:
- Thinkific: Best overall employee training software
- 360Learning: Best for collaborative learning
- TalentLMS: Best for industry compliance
- Trainual: best for onboarding/new hire training
- SAP Litmos: Best for supporting employees in multiple locations and languages
- Bridge: Best for performance management and testing
What Is an LMS Frequently Asked Questions (FAQs)
Yes. Most modern LMS platforms offer integration capabilities with other software systems, such as HRIS, customer relation management (CRM) tools, and content management systems. These integrations help streamline data flow, improve user experience, and provide a cohesive technology ecosystem for managing various business processes.
Security considerations include data encryption, user authentication, and access controls to protect sensitive information. Regular updates and patches are also essential to address vulnerabilities. Additionally, compliance with data protection regulations, such as GDPR, is critical.
The level of customization available in an LMS varies by platform. Many LMSs offer extensive customization options, which allow organizations to tailor the interface, branding, and functionality to meet their specific needs. This can include user roles, course structures, assessment types, and reporting features.
Bottom Line
Whether you’re a small, heavily regulated business or a large company with extensive onboarding materials, an LMS can help you organize and administer the resources necessary to meet your goals. Beyond just training your employees, you’ll also gain insight into how education requirements can impact performance, well-being, and overall job satisfaction. If you’re considering an LMS, take time to evaluate your needs and research providers before signing up for a paid platform.
