Leadership Return on Investment Calculator

Leadership training return on investment (ROI)

A study by MIT Sloan School of Management found that a 12-month workforce training program focused on soft skills delivered a 250% return on investment (ROI) within eight months of completion. Calculate how much your Return on Investment might be!

According to research published in the Journal of Applied Psychology (Lacerenza, Reyes, Marlow and Joseph 2017) effective leadership training programs can lead to a 25% increase in learning, 28% increase in leadership behaviors performed on-the-job (i.e., transfer), 20% increase in overall job performance, 8% increase in subordinate outcomes, and a 25% increase in organizational outcomes.

For our default figures, which you can change, we have used a productivity increase for the participant of 15% in order to be conservative, but kept the 8% from the research in relation to the impact on the team.  You can change all of these figures.

Important note: this calculator is provided as a guide only.  It is not designed nor intented to be investment advice.  One of the biggest determinants of whether businesses realise the returns indicated will be the commitment of participants and businesses to fully engage in the course and to apply the learning into the workplace.

Enter the total cost of the course before any Government incentives or subsidies. We have added a default cost for you, but you can change this. Just refer to our respective course pages for up to date course costs.
Enter any Government subsidies for the course (such as the Apprenticeship / Traineeship funding for the course)
Enter any other incentives you may receive for this individual (such as commencement and completion incentives.)
Enter your employee’s approximate hourly rate. Don’t forget to include superannuation and even an on-cost if you want to get a more accurate final figure.
This is the number of face to face workshops that the course has. We have put a “default” number of 60% (we got this figure from research published by Atlassian on their website) , but you can change this of course. The higher the percentage, the more productive you think your employee is.
Please enter a number from 1 to 10.
Let’s assume that for every workshop that a student attends, there are an additional 4 full days (8 hours per day) of workplace study that the student needs to do. This is quite a bit more than what actually occurs in practice, but this will ensure that we don’t miss any “hidden” costs.
Please enter a number from 1 to 60.
The average weekly hours your employee works.
Please enter a number from 1 to 90.
This is the productivity rate of your employee. As a percentage. Just use whole numbers between 1 and 90. No, we don’t think someone can be 100% productive all of the time!

 


 

A participant in our leadership training will not only improve their own productivity and effectiveness, but will have a measureable impact on those around them. If you provide information about how many direct reports the participant has, or has supervisory responsibility for, we will add that information to the calculations, which will give you a better understanding of your true Return on Investment.

We have included some “default” figures to help you get started. You are welcome to change these to see how this effects the final calculations.

 

Please enter a number from 1 to 60.
The recipient of the training will not only improve themselves, but even more importantly, should have a positive impact on those around them. If you can provide the number of team members that the employee has a supervisory or management role for, this will help in calculating the true Return on Investment. Do not include your employee in this number.
Please enter a number from 1 to 150.
Specify the average hourly rate for the team. We recognise that individual team members may have different hourly rates, so estimate what an “average” hourly rate might be and add it into this field. This is needed in order to calculate the true Return on Investment in your leadership program.
Please enter a number from 1 to 60.
How many hours do each of the team members work. on avearage? We recognise that each team member may work different hours. Just approximate how many hours, overall, the team would work in a week and divide that by the number of people in the team.

 


 

This section allows you to specify how much of a productivity improvment you think that the employee will have. Research, published in the Journal of Applied Psychology (2017) indicates that effective leadership training results in an, on average, 15% productivity improvement for the participant and an 8% team productivity improvement – i.e. those over whom the participant has influence!

We have included some “default” figures to help you get started. You are welcome to change these to see how this effects the final calculations.

 

Please enter a number from 1 to 30.
This is the productivity improvement that you would expect from your employee as they learn new skills and improve on existing ones. In our calculations, we will use this figure as the percentage of improvement that they “should” gain from doing the course. This will raise the Employee Productivity rate you specified by this percentage amount.
Please enter a number from 1 to 90.
This is the productivity increase that the employee will cause in their team because of their participation in the course. Research is clear that improving soft skills in leaders has knock-on effects on other team members. We will use this figure to improve the productivity figure you suppled in the Employee Productivity field.
Choose how many years you want to calculate your Return on Investment on. This will still be a on a per annum basis. For example, if you want to know your return on investment for two years, choose 2 and the ROI Calculator will show you the Annual Return on Investment for each of those 2 years. It assumes a constant wage cost over that period and a constant productivity increase over that time.

 


 

This is the important information that you want to know. If I invest in an effective leadership training program, what might me return on investment look like. From the information that you have provided, these are the results.

 

Hidden
These are the direct out of pocket costs of the course. It equals the course cost minus the government subsidies and incentives that you have identified.
Hidden
Your employee costs you (on average) this amount per year.
Hidden
This is what your employee’s non productive time is costing you.
Hidden
This is how much your team is currently costing you in lost productivity based on the productivity rate identified above.
This is the combined cost of your direct out of pocket expenses for the course PLUS the cost of the time required by the employee to complete their assessments.
This is how much the course has saved you based on your employee’s improved productivity because of their leadership training WITHIN ONE YEAR OF TRAINING.
This the return on your investment based on the entire course cost, including your direct out of pocket expenses and your embedded costs as a percentage.
For every $1 you invest, this is what you get back. This the return on your investment based on the entire course cost, including your direct out of pocket expenses and your embedded costs as a dollar amount for every dollar you have invested.
This is the amount the course has saved you based on the increased productivity of the team your employee has influence over. Employees will not only improve their own productivity, but will also improve the productivity of those over whom they have responsibility.
This the return on your investment for your employee’s team based on the entire course cost, including your direct out of pocket expenses and your embedded costs as a percentage over the number of ROI years you chose. This number is PER ANNUM
For every $1 you invest, this is what you get back based on your employee’s influence and impact on their team. This the return on your investment based on the entire course cost, including your direct out of pocket expenses and your embedded costs as a dollar amount for every dollar you have invested.

 


 

If you would like to know more about our Leadership program, please complete the fields below and we will be in contact very shortly. You do not have to complete these fields in order to use the calculator, but we encourage you to reach out to us in order to take advantage of our program.

 

Name
Please tell us what business you work for (if applicable)