1 . Training return on investment ( ROI ) is a calculation of economic return on a project .
An organization lost 125 employees last year , at a cost of $ 5,000.00 each . ( Value is derived from cost to rehire and fill opening , as well as lost investment in the employee .) You suggest that a one-time investment in a training program ( costing $ 250,000 up front ) will reduce turnover by 50 %. Calculate the following numbers using historical figures as your assumptions .
2 . Cost-benefit analysis presents data as a ratio to determine financial impact on company profitability . The formula is : cost-benefit ratio = value of projected benefits divided by cost .
We have estimated that a training program on sexual harassment will cost $ 14,000 and result in a savings of $ 70,000 ( the cost of the two settlements we paid last year ).
Value of projected benefits = $ 70,000 Cost = $ 14,000.00
3 . Break-even analysis . This is the point in which revenue ( or savings ) from the program equals the cost of the program-the time the company has " broken even " on the cost of the training .
Formula = Break-even point = cost / savings * time