Measure the ROI of an HR Initiative - Worked Example
Author: Raymond Halagera
Profit pressures have caused organizations to intensely scrutinize and evaluate their initiatives and programs. Businesses primarily assess the Return on Investment (ROI) of an initiative to prioritize its implementation, or to discontinue its execution.
HR, like all other business functions, is accountable for expenses related to its initiatives, programs, projects and services, and may position itself as a business-oriented function by:
- Proactively accounting for its expenditures; and
- Measuring the ROI of an HR initiative, program or project.
In doing so, HR becomes competitive to line and other staff functions in securing approval for proposed expenses on terms that are meaningful and accepted by decision makers.
This Worked Example illustrates this process by showing how HR may measure the ROI of a sexual harassment prevention training program.