Using ROI to Make Your Case for a New Program
I just had the opportunity to keynote the Society of Human Resource Management (SHRM)’s 60th anniversary conference in Chicago. After I spoke, I attended an extremely useful session from Elizabeth Ruske and Betsy Sobiech of Tiara Coaching. Although the topic was elevating global women’s leadership, the speakers presented a simple process for planning a strategic, ROI-generating initiative that is relevant across the board. I only wish I had had 10 years ago.
In the HR space, ROI can be rather elusive, and this is one reason our functions tend to get relegated to the tactical realm. For your future benefit, here is Tiara’s process using women’s leadership as an example.
Step One: Assess Where You Are
Rate women’s leadership development in your organization from 1 to 10, with 1 being that no programs currently exist, and 10 being that you have visible efforts and sponsorship for female leaders. On the same continuum, indicate where you will be by next year, and where you will be by the year 2020. While completing this step, consider that women’s leadership development might include women’s affinity groups, mentoring for women, succession planning, leadership and career coaching, learning opportunities, rewards and recognition, recruiting and hiring, company communications, and other efforts designed to attract, retain, and advance women.
Step Two: Determine the “Why?”
Look at where you want to be in the year 2020. Why do you want to be here? What is the bigger vision? Using the example of women’s leadership, this might include the fact that half of all of your college hires are women, yet by the middle management level, most have been lost or grounded. It might be the case that most of your customers are women and you need your employee demographics to match your consumer profile. Or finally, you might consider that companies with more female leaders have better overall financial performance.
Step Three: Decide What You Want to Do
What types of programming will help you get where you want to be in 2020? List the “whats” along with their intended outcomes. For instance:
- Executive sponsor program, 5% increase in succession roles filled by sponsorees
- Company-wide gender differences workshop, 5% increase in female retention
- Career development coaching for high potential millennials, 5% increase in female promotions
Step Four: Add Up Your Cost of Investment and Quantify Your Gain
Budget (meals, space, materials, speakers) + Donated resources (volunteers, in-kind donations) + Staff (paid resources) = Total Cost of Investment.
____percent completion of intended outcomes
____# participating in the program
____Recognition of the program by the company
____Reported benefits received by the participants
____Retention of participants into the next program
____Total Gain on Investment
Step Five: Calculate Your Initial ROI
Gain on Investment – Cost of Investment/Cost of Investment = ROI
Do you engage in a process like this before undertaking – or trying to persuade the higher-ups to undertake – a new initiative? If not, you may want to rethink your approach for better results. In Part II of this post, to be published next month, we’ll tackle a related topic – how to tell if your planned initiative is strategic.
Would you like to see your potential ROI on automating onboarding? Try our Onboarding ROI Calculator!
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