Return on Investment (ROI) Analysis

This systematic and effective measurement process evaluates and quantifies, in monetary & non-monetary values, the return on investment of an HR implementation.

How can an ROI impact study benefit your organisation?

Organisations can be rewarded with both tangible and intangible benefits when implementing the ROI process.

Tangible Benefits	Intangible Benefits
Measures Contribution	Increased job satisfaction
Sets Priorities and Forecasts	Increased organisational commitment
Focuses on Results	Improved customer service
	Reduced complaints

The ROI calculation is based on converting both tangible (hard) and intangible (soft) data into monetary values.

ROI Process

Step 1. Collect Data

This includes both pre- and post-program data (hard and soft). Data collection methods include surveys, questionnaires, workplace observation, interviews, focus groups etc.

Step 2. Isolate the Effects of the Program

This is a critical phase and is often overlooked. Strategies that isolate the effects of the program can include the use of control groups, trend line analysis, forecasting, end-user estimations as well as supervisor and management estimations.

Step 3. Convert Data to Monetary Value

This part of the process requires a value to be placed on each unit of data connected with the program.

Step 4. Calculate The Return on Investment

The calculation is made using the following formula:

ROI (%) = Net Program Benefits x 100
                   -----------------------------
                        Program Costs

The HRS Group is accredited worldwide to implement ROI impact analysis within organisations using the Dr. Jack Phillips Model of Return on Investment for HR solutions.

As ROI analysis experts, the HRS Group delivered an ROI paper titled “Unravelling ROI: a practitioners approach” at the Australian Human Resources Institute (AHRI) Conference. Please contact us to receive a copy.