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. |