The Partners for Organizational Success Newsletter
Volume Two | Issue One | Spring 2009 | Past Issues
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The ROI of Investing in Your People A colleague reminded me that the dollars and cents payback of coaching, leadership assessment and development isn't always evident or obvious. Our experience tells us that investing in leaders and employees yield great dividends, but what do the studies tell us? Here are some of the reported benefits I found resulting from well-planned investments in people: Pre-employment selection assessment/testing ROI: Using the right selection tools and processes accurately predict job performance, better use of safety practices, potential for advancement, reduced turnover, and increased sales (Hogan, 2009). |
Coaching ROI: Coaching supports elimination of "fatal flaws" and greater self-awareness (Harvard Business Review Research Report, 2009), markedly improved working relationships and better quality of work output (Manchester, 2001). The return on investment in coaching was found to be 300 to 500% (MetrixGlobal). Leadership development ROI: Executive and professional development efforts yield greater productivity and quality of work, increased organizational capability, more effective relationships at work, and higher levels of job satisfaction (Manchester, 2001). DDI (2008) found that organizations reported an ROI of $50,000 to $200,000 per leader when utilizing 360 degree feedback, tools that increase self-awareness, team-based interventions, intensive training and development programs, or one-on-one coaching work. |
Employee survey ROI: The keys to getting a return on your investment in an employee survey is to make sure that: * the survey is designed and run properly and * leadership takes action to respond to the results. Responding to the results of employee surveys has been found to be related to an increase in positive employee morale. Higher morale leads to greater satisfaction with jobs, pay and job security. In turn, these attitudes have been found to be positively linked to earnings per share (Schneider, 2003) and lower turnover (Hom & Kinicki, 2001). Looks like our experience and the research both show that there is indeed a link between investing in your people and positive measurable business outcomes. 
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