HR team wants to improve human capital ROI. How can they measure if they are progressing towards their objective?
Human Capital ROI is the financial value contributed by your employees. It helps to measure the productivity of Human resources. These are some potential indicators:
1. Employee turnover rate
A high employee turnover rate will be a high cost to the company. Replacing high performing employees costs a lot of money. Decreasing the turnover rate of high performers from 12% to 5% will represent an improvement in human capital ROI.
2. Training investment per employee
If your training investment per employee $2000, increasing it to $7000 and provide a proper level of training and skills to be developed in employees will increase retention of high performers, in turn, improve the human capital ROI.
3. Internal promotion
Identifying the right leadership and managerial support is highly essential for an organization. Proper training to the right resources will help the management to promote internal resources to higher levels would have a huge impact on ROI. This helps HR team to accomplish their objective.