How to Choose an LMS Platform: 10 Key Criteria for HR | Smart Way
Choosing a Learning Management System (LMS) is a strategic decision that can fundamentally change the effectiveness of training in your company. Every day, we see companies trying to find the perfect balance between functionality, price, and usability. The LMS market is huge, and it's easy to make a mistake.
The problem is that a poorly chosen LMS platform isn't just a waste of money. It's wasted employee time, team frustration, and a delay in talent development. According to a survey conducted by Brandon Hall Group among 135 companies, about 58% of organisations plan to replace their current LMS system, often because it doesn't meet their real needs. According to our statistics, 70% of LMS Smart Way clients switched from other LMS platforms, mainly due to a lack of quality support, difficulty in creating lessons and tests, uninformative reports, and high costs.
So, how do you choose a system that will become your reliable partner rather than a headache? You need to consider several factors. This article is your detailed guide, based on expertise, market analysis, and real-life case studies. We will break down 10 key criteria to help you make an informed decision for your business.
What is an LMS System and Why is it Important for Your Business?
Before we get to the criteria, let's quickly understand what is an LMS? An LMS (Learning Management System) is software for administering, documenting, tracking, reporting on, and delivering training programmes.
But in reality, an LMS is much more. It's not just a "folder" for courses. A modern LMS system is an interactive environment that automates onboarding, helps create personalised development paths, conducts staff training, monitors knowledge retention, and evaluates training effectiveness.
For your business, this means direct benefits:
Resource savings: Reduced costs for in-person trainers, logistics, and printed training materials.
Scalability: The ability to train 10 or 10,000 employees simultaneously, at any time and in any place.
Effectiveness: ATD research shows that companies with advanced training programmes receive 218% higher revenue per employee.
Now that we understand its value, let's figure out how to choose an LMS that will deliver these results specifically for your company.
10 Key Criteria for Choosing an LMS for Employee Training
When choosing a platform, it's easy to get lost in marketing brochures. To prevent this, use this checklist.
Criterion 1. Define Your Goals and Training Audience
This is a fundamental step. Before watching any demos, answer the questions: "Why do we need an LMS?" and "Who will we be training?".
The Problem: Vague Goals. Many companies make the mistake of choosing an LMS with the "most features". But if your goal is to onboard new starters quickly, you may not need a complex competency management module. Define your goals clearly:
Automate onboarding for new employees within 2 weeks.
Conduct annual compliance certification for the entire company.
Ensure sales managers have knowledge of standards and products.
Organise training and development for the talent pool.
The Solution: Involve Stakeholders. As Matt Kurtin, Director of Technology at Innovative Learning Group, notes, it's important to "be sure to consider the specific needs of your entire organisation and involve a cross-functional team". Talk to department heads, as well as future users, and define your needs.
Criterion 2. Platform Type: Cloud (SaaS) vs On-Premise
All LMS systems fall into two main types based on their deployment model.
Cloud LMS (SaaS – Software as a Service): The platform is hosted on the provider's servers. You access it via the internet for a subscription fee. This is the choice for most modern companies, especially small and medium-sized businesses.
Advantages: Quick start (often in minutes, like with LMS Smart Way), no IT infrastructure costs, automatic updates, and technical support from the vendor. The SaaS LMS market is projected to grow the fastest because it's the simplest and cheapest option to launch.
On-Premise LMS: You buy a licence and install the LMS software on your own servers.
Advantages: Full control over data and customisation.
Disadvantages: High initial cost, and the need for a strong IT team for support and updates.
For most HR tasks, especially if you want to focus on training rather than server administration, a SaaS LMS is the optimal solution.
Criterion 3. Essential Functionality for Creating and Managing Training
The LMS must meet your requirements. Make a list of "Must-have" (essential) and "Nice-to-have" (good to have) features.
Basic Features ("Must-have") It's hard to imagine a training process without them:
Learning Content Management: The ability to upload various formats (video, PDF, Excel, Word, presentations, SCORM). According to research, 83% of people prefer video, so make sure the LMS handles it well.
Test Creation and Delivery: Flexible settings for creating tests, and an automatic knowledge-check function. Modern LMS platforms offer AI for generating tests. Ensure the AI generates high-quality tests and has a limit of at least 100 questions.
Progress Tracking and Reporting: Clear analytics – who is learning, how successfully, and where they are encountering difficulties.
Mobile Access: A modern LMS platform must provide convenient access to training materials from any device. This is especially important for supporting a continuous learning process and allowing staff to learn at their own pace. A responsive web interface significantly increases user engagement and training effectiveness.
Advanced Features ("Nice-to-have") These features enhance the learning process:
Gamification: Points, leaderboards, and badges to increase motivation.
Automation: Assigning courses by department and position, deadline reminders.
Learning Paths: The ability to create courses and combine them into sequential development programmes.
Webinars and Communication: Integration with Zoom/Teams, forums, chats.
Criterion 4. Integrations with Your Company's Other Systems
An LMS should not exist in a vacuum. It's important that it can "communicate" with other tools you already use.
HRIS/HRM: For automatic synchronisation of employee profiles, positions, and departments.
SSO (Single Sign-On): The ability to log in via a single corporate account (Google, Microsoft).
API: Having an open API allows you to set up any custom integrations in the future.
Criterion 5. Usability (UX) and Intuitive Interface
This is one of the most important criteria. Even the most powerful LMS platform is useless if it's difficult to use.
From the Administrator's (HR) Perspective: Do you spend hours figuring out how to upload a course or pull a report? If you can't intuitively find the right button, the LMS team hasn't done its job.
From the Employee's Perspective: This isn't just about "good design". A Brandon Hall Group study found that 44% of organisations are dissatisfied with their LMS's UX. Employees don't want to go on a quest just to find their assigned course. "The most important thing for them is the simplicity and intuitiveness of the LMS, which makes learning easy," writes e-learning manager Benjamin Hunter.
Tip: Always test the demo version yourself and, for a true test, give it to a few colleagues in different roles without instructions.
Deep LMS Analysis: What Else to Look for When Choosing?
The first five criteria are the foundation. But for a successful long-term LMS choice, you need to dig deeper.
Criterion 6. Data Security and Compliance (GDPR)
An LMS system stores sensitive data: personal employee information, their test results, and confidential company training materials.
Ensure the provider offers:
Data encryption (in transit and at rest).
Compliance with standards (e.g., GDPR, if you operate in the EU market).
Regular backups.
A clear privacy policy and segregation of data access rights.
Criterion 7. Technical Support and Onboarding from the Vendor
Imagine this: an important test fails the day before an assessment, and technical support takes three days to reply. For a small business, where HR often plays the role of L&D and LMS administrator, the quality of support is critical.
Find out:
What support channels are available (chat, email, phone)?
What is the response time (SLA)?
Is support available in your language?
Does the vendor help with initial setup and migration of training content?
Is there a knowledge base for administrators?
Furthermore, some providers, like LMS Smart Way, offer not just technical support but also HR consultations on building a learning management system. This is a huge added value.
Criterion 8. Scalability and Flexibility (An LMS with Room to Grow)
Your business is growing. Today you have 50 employees; tomorrow, 500. A system that barely "handles" 50 users will need to be replaced, and that means a new LMS selection and migration process.
The LMS must be flexible. Ask the vendor:
Is it easy to add new users?
Are there limits on the volume of training materials?
How often are updates released?
Choose an LMS system with room to grow, not just for your current tasks.
Criterion 9. Transparent Pricing and ROI Calculation
The budget is always an important factor. But the "cheapest" LMS can be the most expensive in the long run.
Pricing Models: What to look for? The most common models on the market are:
Per active user: You pay only for those who actually undertook training during the reporting month. This is a flexible model for companies with fluctuating training needs, but the cost is usually $2-3 per user, which can be more expensive than a standard fixed subscription.
Per registered user: A fixed fee for every user in the system, regardless of activity.
Subscription (tiers): For example, a "up to 500 users" package, "up to 1000", etc., with the option to buy more packages for continuous scaling.
Hidden Costs and ROI Calculation. Clarify any hidden fees:
A fee for implementation (onboarding)?
A fee for additional modules (e.g., gamification or API)?
The cost of technical support?
Storage limits?
And most importantly – calculate the ROI (Return on Investment). An LMS is an investment. If it saves HR at least 10 hours a month by automating onboarding and reduces staff turnover by 5% thanks to better adaptation, it will quickly pay for itself.
Criterion 10. Implementation Plan and Change Management
You've chosen the perfect LMS. What's next? Success depends on implementation. Gartner notes that 75% of IT projects fail, partly due to a lack of a clear launch strategy.
Technical Implementation. If you've chosen SaaS, the technical part is simple. For example, with Smart Way, it takes 30 seconds. But you still need a plan:
Who will migrate the existing training content?
Who will set up the integrations?
When will we conduct the pilot launch?
Change Management People don't like new tools. You need to "sell" the LMS to the team.
Get backing from leadership.
Explain the benefits to employees (easy access to knowledge, mobility, transparent development).
Appoint "ambassadors" in departments.
Conduct brief training sessions on how to work with colleagues.
It's not enough to just send an email with login details. A successful LMS implementation is a separate HR project.
Practical Steps: How to Test and Select an LMS System?
So, you have your 10 criteria. Now, let's get practical.
Create a Requirements Checklist for Your LMS Platform
Put all 10 criteria into a table. Against each item, write your requirements: "Must-have", "Nice-to-have", or specific parameters ("needs integration with our HRIS", "24/7 support not needed, 9-6 is fine"). For each LMS candidate (and you should have 2-3 on your final list), give them a score.
Use the Free Demo with Real-World Tasks
The best way to choose an LMS system is to test it. But don't just "click around". Give it a real task:
Task for the Admin: Try to create a training course from scratch, upload videos, files, generate tests for employees using AI, and assign this course to a test group. Then, export a report. How long did it take? Was it convenient?
Task for the User: Ask a colleague (without instructions) to log in to the LMS from their mobile, find the course, and complete it. Did they have any problems? Was it convenient?
Task for Support: Ask the technical support tricky questions (especially during the demo period). Evaluate the speed and quality of their response.
Conclusion: Choosing an LMS is a Strategic Investment in Your Business, Training, and Staff Development
So, how do you choose an LMS platform? It's not about finding software to tick a box. It's about choosing a partner for the development of your business.
When choosing an LMS, don't chase the number of features. Look for a system that solves your business problems, is understandable to your employees and you, and also allows for growth.
Use these 10 criteria as your map. Define your goals, test the functionality, evaluate the UX, check the support, and calculate the ROI. If you approach the LMS selection process systematically, you will find a solution that will turn your online training into a powerful tool for your company's growth.
And remember: the best LMS is the one that gets used.
To learn about the capabilities of LMS Smart Way - book a platform presentation and get a free one-month demo.
FAQ: 5 Key Questions About Choosing an LMS
What is more important when choosing an LMS: maximum functionality or a simple interface (UX)?
The answer depends on your users, but as a rule, for successful training implementation, a simple and intuitive UX (Criterion 5) is more important. Research shows that 44% of companies are dissatisfied with their LMS's UX. If you choose an LMS system with a complex interface, employees simply won't use it, and all its "powerful" features and capabilities will be useless.
What is the most important criterion when choosing an LMS?
The most important thing is to clearly define your goals (Criterion 1). Don't buy features you don't need. If you want to automate onboarding, look for an LMS with powerful automation. If you need certification, focus on testing tools, such as tests for employees. Your needs are the main filter.
What is better for a business: a cloud (SaaS) or "on-premise" LMS?
For 95% of companies, especially small and medium-sized businesses, a cloud (SaaS) LMS is the best choice. You get a quick start (no server costs), automatic updates, and technical support. On-Premise (your own server) gives more control but requires significant IT resources for support.
How much does an LMS platform cost?
The cost heavily depends on the pricing model. The most common are paying per active user (you only pay for those who learned) or a fixed subscription for the total number. Always clarify hidden costs: fees for implementation, extra modules, or storage limits.
How long does it take to implement an LMS system in a company?
It depends on two things: the technical launch and "change management". Technically, modern SaaS LMS platforms are ready to go in minutes. But the real implementation (migrating content, training administrators, motivating the team) can take from a few days to a few weeks. The main thing is to have a clear plan (Criterion 10).