Applying ROI Methods

ROI methods are applied for in-depth quantitative evaluation of programs by employers who want to have very concrete information about the value of investing in workplace basic skills development.  For them, Return on Investment (ROI) measurement is crucial.  Generally, ROI expresses the financial return on corporate investment by measuring the full cost of training and relating it to corporate financial performance.

ROI measurement of workplace education programs is possible using evaluation software:   

For an established consulting company that has measured a number of public and private sector organizations' WEPs and offers specialized, customizable ROI software, contact:
    URL: http://www.imperialcorp.com

For a combination of training media selection and ROI software, ADVISOR 3.5, see:
    URL: http://www.bnhexpertsoft.com/adv3new.htm

For a corporate ROI methodology already in use within Lord Corporation, a large North Carolina-based company, that may be applied by other companies, see:  ROI Method. 

Workforce HR Trends and Tools presents several formulas for calculating the return-on-investment in technology-based training. The formulas can help employers calculate cost savings and ROI, and perform a break-even or cost-benefit analysis.
     URL: http://www.workforce.com/section/11/article/22/13/78.html

This report talks about methods for evaluating training/education offerings based on financial return and these methods include both quantitative and qualitative assessments.
     URL: http://www.careertools.org/rlib/doc_display.asp?docn=8386

This article shows how ROI is a measure of the benefits of training against the costs. The ROI is expressed as a concrete, numerical measure that gives employers more clout in justifying the time and money spent for training.
     URL: http://www.cuna.org/data/newsnow/spec_reports/cpd/cpd4.html

The free Training Payoff Calculator, from Addison, IL-based OneOnOne Computer Training, helps executives calculate the ROI from training. The calculator works with variables, such as the number of people to be trained, average learning time, and costs of training effort to produce projections of profit and ROI.
     URL: http://www.oootraining.com/ooo/support/calculator.html

Staffing-Assessment Tools can help employers measure the return on investment of an assessment tool. The formulas will help you gauge the impact of a bad hire, a good hire, turnover, and a more efficient staff.
     URL: http://www.workforce.com/section/06/article/23/40/88.html

Make training more accountable by incorporating these guiding principles as operating standards in your return-on-investment methodology. Standards and guiding principles keep the evaluation credible and allow for replication of the methodology.
     URL: http://www.workforce.com/archive/article/23/31/90.php

To measure true cost for ROI purposes, consider indirect costs along with direct costs. Companies differ in how they calculate the cost of internal training, but most include the direct costs incurred by the training function, which are discussed in this article.
     URL: http://www.workforce.com/archive/article/22/13/88.php

Calculating the ROI of training is sometimes simple, sometimes subjective and sometimes not worth the effort. Start by looking at the productivity effect, but in more complicated scenarios, the best approach may be to focus on value and results, rather than numbers.
    URL: http://www.workforce.com/archive/feature/22/17/10/index.php

A Canadian sector council report on calculating the return on training investment includes checklists to help employers identify costs and benefits and a case study example.
     URL: http://www.nssc.ca/files/roti.pdf (1.03 MB)

This article shows how to balance short-term profit with long-term investment in human capital (Benefits & Compensation Digest). Due to socioeconomic shifts including an impending demographic meltdown and a fall in U.S. workforce productivity, it is increasingly important to measure the effectiveness of every human capital development effort through calculating its return on investment (ROI).
     URL: http://www.imperialcorp.com/whatsnew.html

For problems or questions regarding this web site contact campbell@conferenceboard.ca.
Last updated: December 8, 2006.