What is ROI?
Return on Investment (ROI) is a performance measure used to evaluate the efficiency and monetary benefits obtained by an organisation over a specified time period in return for a given investment in a training programme. ROI is the extent to which the benefits (outputs) of training exceed the costs (inputs).
Why is it important?
ROI can be used both to justify a planned investment and to evaluate the extent to which the desired return was achieved.
How does it work?
To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment and expressed as a percentage or a ratio as a result of investing in a training programme.
The return on investment formula:
Following a programme, benefits can continue to accrue and therefore, the period that you specify is critical to the end ROI figure you will obtain.