ROI Of Human Resources

At McLaughlin Human Capital Consulting, we offer a wide range of services designed to improve your business and Human Resources processes with the right information and solutions and with a measured outcome in the form of a financial ROI. We start each project with an analysis of the current cost of a function, e.g., the “before” cost and then develop the “after” cost of the function when the project is completed. Although many organizational projects are not measured for their efficiency and effectiveness, we believe it is important to provide financial data for the investment in all significant improvement projects. Using Human Resources Analytics helps to quantify many key components of an HR and business function.

 

For example, an organization needs to reduce the number of customer complaints because of the time and money it takes to resolve these complaints. 

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In projects like these we employ the classic ROI methodology including measurements of these key variables:

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1. The employee’s reaction to the proposed new program - e.g., a new training program on customer service to reduce complaints. 80% like the program. 

2. The employee’s acquired knowledge of the new program- e.g., a test that shows the new knowledge acquired. Average employee scored 82%

3. The employee’s ability to apply their new knowledge -e.g., the data that shows the reduction in complaints from the training. Complaints reduced by 25 per week

4. The Monetary impact of the new program-e.g., the cost savings from reduced complaints. 25 complaints X $ $100 = $2,500 savings 

5.  The Net savings of the new program/Cost of the program= ROI 

            Before = current complaint cost $100 X 50 =$5,000/week X 52 = $260,000

            Cost of training program = $50,000 

            After = complaint cost savings =$100 X 25= $2,500 X 52 weeks = $130,000 

            ROI = Net Benefits/Cost = $130,000-$50,000= $80,000/50,000=160%

             

               For each $1invested the return is $1.60. 

 

We further isolate the cause of the improvement by a process of analyzing other possible reasons other than the training program that would reduce complaints.

 

We are experts at providing companies of all sizes with detailed information regarding their current Human Resources Analytics and business processes and areas where improvements are needed. The reason for providing a financial ROI is to show accountability for each project and to demonstrate to management the tangible value of the investment in the change. 

 

To improve the ROI of Human Resources, companies need a consultant with the tools and insight to propel them to better growth. At McLaughlin Human Capital Consulting, we strive to offer companies the opportunity to learn more about the cost of   their current processes. This gives them the option to make changes and modify approaches that impact their company's growth and operations. We offer many services that can be tailored to fit each organization we serve and give them options that make implementing better solutions easier and more effective. 

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Reach out to us today to get answers to questions or find out how we can team up to get the ROI of Human Resources for all important projects.