ROI for Human Resources: how to measure the results of HR actions?


Why is staff involvement convenient? How to measure?

Efficient management is always conditioned by good financial planning. Therefore, decisions relating to corporate investments must be based on detailed research that confirm the degree of benefit of the actions undertaken.

It is also essential to take preventive measures and health promotion programs (such as work-related stress) into consideration which are closely linked to turnover, absenteeism and attendance rates among employees.

ROI (Return on Investment) measures the results generated by each investment through indices.
Using these indices, the HR sector can position itself in a more strategic way, ensuring high levels of performance, engaging and motivating the team.
ROI can be used by the human resources office to measure its main processes. A good example could be the involvement of collaborators through the “Ideas Competition”.
The investment in this type of action will be confirmed through a reduction in costs related to waste and medical assistance, to the increase of efficiency and effectiveness of existing processes and to the innovation generated by new ideas and virtuous and ethical behavior.
The productivity of professionals or a team in any area of the organization is always connected to other factors, for example, training, motivation, involvement, satisfaction and well-being. Therefore, some indicators must be constantly monitored, since they help to identify problems and trends.

Some important productivity indicators to monitor

ABSENTEEISM: It is important to understand the reasons for this behavior. Based on the analysis of medical cases, it is possible to check whether the implemented health program is reaching the expected objectives or not.
PRESENTEEISM: It is when the collaborator has no interest in the job. This indicator is usually linked to dissatisfaction with the company or its managers and may indicate a lack of career prospects. Thus, talent engagement programs must be reviewed.
TURNOVER RATE: If considered high, it could show the company’s lack of attractiveness in relation to the market, growth processes and compensation programs, salary and benefit policies, as well as a non-optimal recruitment.
ORGANIZATIONAL ENVIRONMENT: The survey of the organizational environment covers various aspects of personnel management, such as the possibilities for growth and training, as well as stimulating the relationship with managers. The answers give an estimate of employee satisfaction to understand which actions need to be improved.
PRODUCTIVITY: Productivity indicators are based on objectives. Thus, there are specific evaluation criteria for each area. It is worth remembering that the goals must be ambitious but realistic. To this end, it is important to give relevance to the limits of performance, position and experience of professionals.
PRO CAPITAL INCOME: This indicator represents the individual financial return of each employee. This is a direct relationship between the profits of the company and its employees. It is also a way to attest to greater productivity.

Wellness and corporate health

Actions directed at company wellbeing and health are very important as they have a direct influence on team performance and satisfaction. With this in mind, several companies have started structuring new employee engagement programs.
In literature, and even more in the experience, there are many examples of profitability obtained through actions aimed at listening and sharing the ideas of all the members of the organization, even for the fact that they have given them the tools to be able to to express.
Companies like Shell, KPN or Xerox boast millionaires savings and it is now known that every € invested in a contest of suggestions generates an average of 13 savings (*)


Executives and managers have already understood that the overall results of all companies are directly related to the motivation and level of commitment of their teams and that, to achieve this, it is necessary to have the tools in step with the times.


(*) Research carried out by Christiaan van Dijk and Jan van den Ende, Management of Technology and Innovation Unit, Rotterdam School of Management, Netherlands


Do you want to create a continuous innovation process? Read Employees engagement in continuous innovation