Valuing the hard-to-measure business skills

The financial contribution of ‘overhead’ roles can be assessed, writes Beryl Oldham of Complete Learning Solutions.

Organisations sometimes sell themselves and their people short by over-investing in initiatives that sound good, without ever considering whether they will truly add value.

Meanwhile, businesses may be missing out on the chance to make efficiencies because they treat ‘soft’ roles such as human resources, and learning development positions, as overheads rather than direct contributors to the bottom-line.

Yet these roles can demonstrate significant contributions.

So, here are five top tips for measuring ‘soft’ initiative return on investment

1. Conduct a needs analysis before doing anything.

Start by asking strategic questions such as; how does the initiative align with and support the organisation’s vision, mission, values and business objectives? How will the initiative add value to the business? Can its returnon-investment (ROI) be calculated?

2. Build ROI evaluation into initiatives at every stage.

Valuable information can be lost if its collection is left until after the project’s planning and implementation.

3. Quantify as much as possible.

Survey, measure time savings, skill gains, performance improvement, etc.

4. Isolate effects from other influences.

Use control groups, trend analysis, forecasting methodology and experts’ estimates of the impact of other factors. Also, be sure to ask participants, supervisors and/or managers about the extent to which they attribute any improvements to your initiative.

5. Translate tangible and intangible benefits into monetary values.

Many different attributes can be assessed, including participants’ reactions to the initiative and their subsequent skills, knowledge and attitude changes.

Behavioural changes can also be measured, along with the business impact.

This can be done by taking before and after measures of the business’s key performance metrics and identify what has changed.

The return-on-investment (ROI) calculation itself is: ROI ( per cent) = Net Programme Benefits / Programme Costs x 100.

Don’t shy away from measures revealing the financial contribution of overhead roles. It can be assessed.