Welcome to the ROI Institute calculators. This page includes four calculators.
- The Monetary Benefits Calculator requires data to be collected in a program at the reaction, learning, application, and impact levels. The impact data is converted to money to arrive at the monetary benefits. This involves converting one or more measures to money and combining them for the total monetary benefits.
- The Program Cost Calculator captures the total costs of the program. The cost of the program should include all costs—direct and indirect. Some costs are easy to find, and these are usually direct costs. Others are indirect and sometimes have to be estimated.
- The ROI Calculator converts your monetary benefits and program costs into a benefit-cost ratio and ROI expressed as a percent.
- The Cost of Turnover Calculator provides an approach that captures all the costs, both direct and indirect. Turnover cost is often understated or undervalued by executives, and this calculator is an essential step in managing talent retention.
Monetary Benefits Calculator
The Five Steps to Monetary Benefits
- Define the unit of measure. This is the measure influenced by the project such as one new customer, one accident, one complaint, one team member turnover, one out-of-compliance discrepancy, and one accident.
- Determine the value of one unit of measure (V). This could be value add such as profit for one new customer or cost avoidance for preventing one accident. For example, use $105 as the value for an unexpected absence.
- Determine the change in the performance of the measure caused by the program (ΔP). For example, if you prevented 28.8 absences per month, you would enter 28.8 in the calculator.
- Annualize the change in performance (AΔP). For example, if it is a monthly change, multiply it by 12.
- Calculate the annual monetary benefits (AΔP*V). Multiply the annual change in performance by the value of the measure.
How to Use the Calculator
In the calculator, enter the value of one unit of measure. Then enter the change in performance of that measure during the course of one month. Click next to proceed to the next measure. This calculator is designed to provide monetary benefits for up to three measures. If you have more than three measures, record your current total monetary value and repeat the process. You will use your total monetary value in the ROI Calculator.
Program Cost Calculator
Calculating Program Costs
All too often, incomplete costs are assumed when reporting the full investment in a program. This calculator will help you determine the fully loaded cost of your programs by totaling the analysis, development, implementation, and evaluation costs. This ensures credible accounting of resource allocation and you will have the denominator for your ROI Calculation.
How to Use the Calculator
Enter the cost for each measure in the calculator. You may have to estimate the cost for some of the measures. When estimating, always use the most conservative number. Once you have entered the costs, click next to proceed to the next set of measures. The calculator will total all your program costs. Record this number for use in the ROI Calaculator.
ROI Calculator
ROI Calculation
To calculate ROI, you take your program benefits minus your program costs divided by program costs times 100. To get your BCR, you take your program benefits divided by your costs. ROI calculations involve costs versus monetary benefits and are represented as a percentage. Use the benefit and cost calculators to obtain your numerator and denominator.
How to Use the Calculator
Take the total monetary benefits from the Monetary Benefits Calculator and the total program cost from the Program Cost Calculator and enter them in the appropriate sections.
Cost of Turnover Calculator
This calculator will help you identify the large and often undervalued financial impact of turnover. We will explore outlining specific costs that should be captured and the economic ways in which they can be developed. One of the important challenges addressed is to decide which costs can be developed from cost statements and which costs will have to be estimated. Some costs are hidden and, consequently, never counted. The conservative philosophy is utilized to account for all costs—direct and indirect.
The first step in monitoring turnover costs is to define and discuss several issues about a cost control system. The key issues are presented here.
Some Costs Are Difficult to Determine
The huge difference that often exists between the cost estimates from HR and the actual turnover cost lies in the indirect or hidden costs category. Where direct costs are usually in the cost accounting system, the hidden costs are almost never considered. However, they can be developed using assumptions and estimation processes.
Fully-Loaded Costs
Using the approach to capturing the fully-loaded costs of turnover, each cost is identified and put into a specific category. Where an estimate is required, the entry is adjusted later. If possible, someone from finance and accounting should review and approve the data. The process should be able to withstand even the closest scrutiny, so organizations must ensure that all costs are included.
Costs are typically expressed as a percentage of the wages and salaries of the employees in a particular job group. This figure is usually determined after a detailed cost study is conducted. The percentage can be fixed for a group (for example, the sales force) or a specific job (for example, client relationship manager [CRM]).
For example, if a cost study in another industry has concluded that the cost to replace a CRM averages 150 percent of pay, this amount can be a beginning point. If there is some concern about the cost being too high, perhaps a lower number would be appropriate, such as 120 percent or 100 percent. After a figure has been determined, the turnover cost is then reported on statements along with the actual costs.
