What is an LMS for Employee Training – A Complete Guide

1. An LMS is a Learning Management System

Many people ask, “what is an LMS system?”. In this article, we will try to provide the most comprehensive answer.

An LMS system (learning management system) is a system for managing learning, a special software that automates and manages the training process, tracks learning outcomes, generates reports, and controls the quality of training. In effect, it is your corporate university where you centrally manage the entire training process and provide access to training materials at any time and from any device.

A Brief History of the Development of LMS Systems

  • 1960s: The first computerised training systems appeared as experimental projects in universities. The PLATO system (Programmed Logic for Automated Teaching Operations), developed at the University of Illinois, is considered one of the first prototypes of modern LMS.

  • 1990s: The Internet fundamentally changed the approach to distance learning. The first web-based systems for managing courses appeared. In 1997, the term "Learning Management System" began to be actively used in professional circles. With the development of the Internet and cloud technologies, LMS systems evolved. They became more accessible, flexible, and powerful, transforming from a niche tool for universities into an indispensable platform for the corporate world.

  • 2000s: A period of rapid development for commercial LMS platforms. Systems such as Blackboard, WebCT, and Moodle (as open-source software) emerged. Corporations began to actively implement LMS for employee training.

  • 2010s: The development of cloud technologies led to the emergence of SaaS LMS models, which did not require complex local infrastructure. Mobility, social features, and an intuitive interface became key trends.

  • 2020s: The COVID-19 pandemic caused an unprecedented surge in demand for distance learning. Modern LMS, such as Smart Way, integrate artificial intelligence, big data analytics, adaptive learning, and other advanced technologies to create a personalised learning experience.

Today, LMS have evolved from simple content delivery systems to comprehensive learning ecosystems that cover the entire competency development lifecycle — from planning to assessing the impact of training on the business.

Advantages of an LMS in Modern Education and Business

Today, the LMS is a standard in both education and business. Most companies in the world already use such platforms. Why? Because an LMS solves key problems: scaling training, standardising knowledge, tracking progress, and optimising costs. An LMS also helps to address modern challenges, including:

  • Remote and Hybrid Working: The pandemic made distance learning a necessity, and learning management systems provide equal access to training materials for all employees, regardless of their location.

  • Lifelong Learning: The pace of technological change requires continuous upskilling, and an LMS platform allows this process to be organised effectively and continuously.

  • Personalisation: Modern employees expect an individual approach, and learning management systems allow for the creation of personalised learning paths, which increases engagement and effectiveness.

  • Ease of Creating Courses and Organising Staff Training: Modern LMS have user-friendly editors for creating training courses; complex SCORM technologies are no longer necessary.

  • Automated Quality Control of Learning Materials: This used to be a serious problem, as it required manually developing many tests to check knowledge. A modern learning management system solves this issue by generating tests with the help of AI. You just need to press a button, and AI will generate tests for each lesson, and the LMS systems will ensure the quality control of the training.

My name is Serhii Rushanskyi, I am the founder of LMS Smart Way, and with over 20 years of experience in HR, I am convinced that a systematic approach to training is the shortest path to increasing productivity and business success.

2. Main Functions and Capabilities of an LMS

A modern LMS is more than just a file repository. It is a dynamic ecosystem that automates routine tasks and makes learning interactive. Here are the key functions to pay attention to.

Content Management for Distance Learning

This is a basic function of any LMS. Administrators and instructors can create content directly in the editor or upload ready-made training materials in any format (video, PDF, presentations, SCORM packages, Word documents). They can also structure them into lessons and online courses and set the sequence of completion. This is the foundation for creating flexible and diverse e-learning programmes.

Automatic Assessment of Learning Quality

Training without assessment is a waste of resources. To ensure that employees have not just “completed” a course but have truly understood the material, an effective assessment system is essential. A modern learning management system transforms this process from a routine check into a powerful tool for knowledge analysis.

The key element here is staff testing. However, creating high-quality tests is a time-consuming task that requires significant time from HR specialists and managers. It is necessary to analyse the training materials, formulate relevant questions, and develop answer options. This is where modern technologies come to the rescue.

Innovative platforms offer the rapid creation of tests using artificial intelligence. How does it work? You simply press the “Generate Test” button, and the AI analyses the content and generates a set of unique questions with answer options in minutes. Most LMS have a limit of 10-20 questions per test. But in Smart Way, you can generate up to 100 questions for a single test. This not only saves dozens of hours but also ensures objectivity. Such rapid test creation using artificial intelligence allows you to focus on analysing the results rather than on routine preparation.

In addition to simple test generation, modern LMS systems also offer:

  • Learning Path: You can set a rule that an employee will not get access to the next lesson until they have successfully passed the test for the previous one.

  • Uniqueness: For each employee or each new attempt, the system can generate a unique set of questions, which prevents cheating and sharing answers.

  • Flexibility: You can set the number of attempts, the time for completing the test, and the minimum passing score.

This approach ensures that knowledge is not just transferred, but also securely retained. It turns the learning management system into a reliable assistant in forming a truly competent team. And the rapid creation of tests using artificial intelligence becomes a key advantage that allows for scaling quality staff testing without extra effort.

Administration and Organisation of the Learning Process

Management via an LMS includes full control over the learning process. The system allows you to register users, group them, assign online courses, and track deadlines. The automation of course assignment is one of the key advantages. For example, in LMS Smart Way, it is enough to add a new employee, and they will get access to all the courses assigned to their position.

Analytics and Progress Tracking

One of the most powerful functions is analytics and progress tracking. The LMS collects detailed data: who studied what and when, how much time was spent, and test results. Managers and HR specialists see the full picture in real-time and can make decisions based on data, not assumptions. Progress tracking is critically important for evaluation.

3. Types of LMS

The market offers different types of learning management systems. How to choose the right one? You need to understand their differences.

Corporate LMS

These are learning management systems created specifically for business and corporate training. The main focus is on employee training, onboarding, upskilling, certification, and partner training. The functionality of such LMS is geared towards business goals: performance analytics, tracking the return on investment in training, and competency management.

LMS for Tutors, Students, and Schools

Designed for educational institutions — schools, colleges, universities. Their functionality is more focused on the academic process: timetables, grading, curriculum management, and communication between students and tutors.

Cloud vs On-Premise

  • Cloud (SaaS) LMS: Hosted on the provider's servers, accessible via a browser. This is the most popular option as it does not require its own servers, is easily scalable, is inexpensive, does not require its own IT department, and is updated by the provider. LMS Smart Way is the best example of a cloud platform. More suitable for small and medium-sized businesses.

  • On-Premise LMS: Installed on the company's servers. This gives full control over data and security but requires significant investment and its own IT team for support. More suitable for large businesses and the public sector.

Open-Source vs Commercial Platforms

  • Open-Source LMS: Software with open-source code (e.g., Moodle). They can be free to download but require significant costs for setup, customisation, and support. They usually require IT specialists for their support. More suitable for large businesses and the public sector.

  • Commercial LMS: Ready-made solutions that provide access on commercial terms. You get ready-to-use functionality, technical support, and regular updates without additional development costs. More suitable for small and medium-sized businesses.

4. Advantages of Using an LMS

The implementation of an LMS benefits all participants in the learning process.

For Business and Corporate Training

  • Revenue Growth: Companies with well-thought-out training programmes and knowledge assessment see 218% more revenue per employee.

  • Productivity: Systematic employee training can increase team productivity by 20-25%.

  • Talent Retention: 80% of employees are willing to stay with a company longer if it invests in their development.

  • Cost Savings: Online training is much cheaper than traditional formats.

  • New Employee Onboarding: A structured onboarding course significantly reduces the time it takes to get new hires up to speed.

For Schools

  • Resource Centralisation: All training materials are in one place, available at any time.

  • Flexibility: Allows for organising blended and fully online learning.

  • Efficiency: Tutors can automate the marking of assignments, progress tracking, and communication with students.

For Students and Employees

  • Flexibility: You can learn at any time and from any device.

  • Personal Pace: Everyone can learn at their own pace, returning to difficult topics as needed.

  • Interactivity: Modern online courses include videos, tests, and simulations, which makes learning in an LMS more engaging.

5. LMS Smart Way

History of the Platform

LMS Smart Way was born out of practical experience. With over 20 years of experience in personnel management in large and small companies, I always faced challenges in organising employee training. The LMS systems on the market were either too complex and expensive for small and medium-sized businesses, or they lacked flexibility. The goal was to create an intuitive, financially and technically accessible, yet powerful LMS platform that would automate routine tasks and focus on the result - creating a productive team for business development.

Unique Features and Advantages of LMS Smart Way

  • Simplicity and Quick Start: Unlike many learning management systems, Smart Way does not require programming or additional setup. You can start training on the day of registration.

  • Automated Quality Control of Training: The system not only assigns courses but also controls the assimilation of knowledge. The “Knowledge Control” function will ensure that the material is well understood.

  • Unique Tests: The platform generates unique test variants for each employee, which significantly increases the team's knowledge level.

  • Talent Management: We have gone beyond training. Our LMS system has professional assessment tools for soft skills. Using these tools, you will first hire productive candidates during the recruitment process, then adapt and train them using the LMS system, and later, using statistics and soft skills assessment results, you will form a talent pool and an effective management team that will ensure your business growth, talent retention, and a loyal and motivated team.

Main Capabilities

The platform provides a full set of tools for managing training: a flexible course and test builder, detailed analytics, automated onboarding of new employees, talent pool management, mobile access to training materials, and much more.

Customer Reviews and Success Stories

“With Smart Way, we have already filled many vacancies, and I am satisfied with the team we have assembled. The assessment of personal qualities is very detailed and thorough. Previously, it was difficult for me to make decisions, with constant doubts due to a lack of information. Now, the candidate report simplifies the decision-making process” - Andriy Avdeev, CEO & Founder

“We have recently started using the system for testing employees; this is our first experience, but I can say with confidence that Smart Way saves time on recruitment.” - Yaroslava Hryhorenko, Recruiter

6. How to Choose the Right LMS

Choosing an LMS system is an important task. The future of your team's onboarding, training, and development system, and consequently the company as a whole, will depend on this choice.

Key Criteria

  • Functionality: Does it meet your goals?

  • Ease of Use (UX): Will it be convenient for administrators and users?

  • Technical Support: Is it available in your language and at a convenient time for you?

  • Price: Is the pricing model transparent and does it fit your budget?

  • Scalability: Can the LMS grow with your company?

Organisational Analysis

Before you start looking for an LMS system, conduct an internal audit. Determine what tasks you want to solve, who will be trained, and what content you already have. This will help you form clear requirements for the software.

Comparison of Different Platforms with LMS Smart Way

There are many solutions on the market. Large corporate systems are too expensive and complex. Open platforms, such as Moodle, require technical knowledge and significant investment for setup. LMS Smart Way is positioned as the optimal solution for small and medium-sized businesses, offering a balance between powerful functionality, ease of use, and an affordable price.

7. Trends and the Future of LMS

The e-learning industry is evolving.

Artificial Intelligence and Machine Learning in LMS

AI is already transforming the LMS. It is used for personalised learning paths, automatic creation and analysis of content, as well as for providing intelligent recommendations. This allows for an adaptive approach to learning.

Mobile Learning and Microlearning

The trend of mobility and short formats is growing. Learning “the go” via a smartphone is becoming the norm. Microlearning — delivering information in 5-15 minute chunks — has proven its effectiveness, increasing knowledge retention by up to 80%.

Gamification and VR/AR Technologies

Game elements (gamification) make the learning process more engaging. VR and AR technologies open up new possibilities for creating immersive simulations for practising practical skills in a safe environment.

How LMS Smart Way Keeps Up with Trends

We keep an eye on the trends. Our LMS platform is fully optimised for mobile devices, supports microlearning, and allows you to break down large online courses into small lessons to increase training effectiveness. We are also implementing AI to make learning even smarter and more effective, and the development of training materials and tests an easy and fast process.

8. Conclusion

Summary of Key Points about LMS

A Learning Management System (LMS) has become a necessity for any organisation that aims to grow. It centralises and automates the learning process, making it measurable, flexible, and cost-effective. Using an LMS allows you not only to train but also to increase productivity, retain talent, and build a corporate culture. Thus, we have provided you with a comprehensive answer to the question “what is an LMS system”; use this knowledge wisely!

Recommendations for Implementing LMS Smart Way

If you are looking for a simple yet powerful solution for employee training, LMS Smart Way could be the right choice, especially for small and medium-sized businesses. Start small: identify one key problem (e.g., onboarding new starters), create courses, and test them on a small group. You will quickly see the benefits of automation and a structured approach.

Implementing an LMS is not just a change in technology. It is a fundamental change in the approach to your company's most valuable asset — its people. It is an investment that pays off in the growth of your team and, consequently, your business.

Ready to take the next step and create a quality onboarding and training system for your team? Get free demo access with full functionality, and make it happen!