What is Employee ROI?

 Employee ROI (Return On Investment) is a performance measure used by business organizations to evaluate the efficiency of their financial resources invested in their workforce, or to compare two or more employee investment opportunities with each other. It proves how good employed people are and whether the invested resources are fully covered by the benefits produced by the employees.

 ROI of employees is calculated as a ratio between the net income of an employee investment and the cost of this investment. The math formula is given below: 

Gains from Investment – Cost of Investment

Employee ROI = --------------------------------------------------------

Cost of Investment 

By using this formula, a business organization can figure out whether to invest in a given employee opportunity or not. If the ROI is negative (that’s the cost is higher than the gains), then obviously the organization should not take the opportunity.

The measure is often used to make a preliminary assessment of employee investment opportunities, so that a business organization has a better way for ensuring that it gets great quality of hire, engaged workforce, and low attrition rates.

Play Demo

	CentriQS -15% OFF Business management software for small & midsize enterprises Play Demo		VIP Task Manager Task management software for teams & small offices Play Demo / Download