Return on Learning Dollar Calculator (ROLD): Commercial Assumptions

Whether you are a for-profit, a not-for-profit, privately owned, publicly owned, a product or a service business, delivering value and return on investment to customers, stakeholders and shareholders is essential for long-term sustainability and success.
Share the Post:

Unfortunately, especially during times of crisis, short-term commercial costs often outweigh longer term business imperatives. When budgets are tight, organisations tend to invest in activities that will deliver immediate benefit and pause investments with a longer payback period.

Learning and development often fall into the latter bucket, as we often will not see the benefit of training or development for months or even years. Additionally, many of the benefits, such as increased productivity or retention, are hidden until these metrics become an issue.

In designing the Peeplcoach ROLD Calculator, we have incorporated the following principles and assumptions to provide human resources and learning and development practitioners an easy-to-use and readily digestible model to share with business leaders, executive teams and boards.

Some cost assumptions to be considered when calculating ROI

1. Every employee should be expected to deliver more value than their cost. For example, if the cost of employing a team member is $100,000 then it would be reasonable to expect a return on this investment. At worst, this could be a multiple of one. That is, an individual with a salary of $100,000 delivers exactly $100,000 of value. While this multiple will vary depending on the role, industry and organisation, it is fair to estimate a return of at least two times an employee’s salary.

COST: Estimate the cost to the organisation of lost profit and value when employees are disengaged, resign and then need to be replaced.

2. The cost of replacing an employee is estimated to be anywhere from 30% of annual remuneration to 300%. This includes direct costs such as recruitment, advertising and onboarding costs. However, these costs are often insignificant compared to the cost of a poor hire, especially if termination is ultimately required. At minimum it could cost an organisation $30,000 to replace an employee with a remuneration of $100,000.

COST: Calculate the true cost of the recruitment process and hiring mistakes. Profit from retention drops directly to the bottom line.

3. Manager productivity is often a hidden cost. After all, when new hires are taken on, the manager must continue to do their day job while somehow fitting in additional recruitment and onboarding processes. While the cost might be hidden, it is real.

COST: Estimate the percentage of lost productivity e.g. 5%, 10% or 25%. What is this loss of productivity costing the organisation or team?

4. Research has shown that leadership development, especially executive coaching, delivers significant productivity gains to organisations – up to a 35% increase in leadership performance, 18% lift in profit and 33% lift in business deliverables (Source 7).

BENEFIT: Calculate the benefit of increased productivity to the team or organisation. For example, if you could lift productivity by 10%, resulting in increased revenue or profit or decreasing head count costs, what impact would that have on the profit line? If you could spend $3,000 on development to deliver $30,000 of value and improvement, this is a 900% return on investment!

5. Lack of engagement is costing organisations billions of dollars in lost productivity. In fact, lost productivity is costing Australian businesses a total of $54 billion per year (Source 3). Staff attrition and turnover, poor culture, low morale, lack of development and career planning, and poor leaders all contribute to this multi-billion-dollar issue.

COST: Estimate what you think poor leadership and turnover is costing your organisation. Are your employees 60%, 80% or 95% productive, and how is this lost productivity affecting you?

6. The number one reason people leave organisations is still their leader. What is poor leadership costing you? 

BENEFIT: If you invested to develop one leader and they were able to retain and develop their teams, what would this deliver to the organisation in terms of increased profit?

Sources

  1. Worldwide: 13% of Employees are Engaged
  2. 8 Employee Engagement Statistics You Need to Know in 2022
  3. How to Calculate the Cost of Employee Disengagement
  4. The Cost of Poor Leadership
  5. The Cost of Poor Leadership on Your Revenue and Culture
  6. 2016 ICF Global Coaching Study
  7. The Benefits of Team and Individual Coaching
  8. Chief Executive Women ASX200 Senior Executive Census, 2020
  9. Workplace Gender Equality Agency, 2021

Sign-up to our newsletter.

Wherever you are in your career, first job, first time leader or leadership guru each month The Pulse will share a 5 min leadership or career hack to help you amplify your professional, team or business impact.

Short and sharp, the Pulse is focused on getting to the heart of the matter, because we know you don’t have a lot of time.

Fostering the Growth of
High-performing Leaders.

Discover how we are partnering with other organisations and making an impact for businesses and individuals.

Scott Thompson

Agnel Dsouza

Jo Hart

Jo Hart is the Chief Operating Officer at Peeplcoach, where she focuses on optimising the systems and processes that drive the delivery of accessible, high-quality coaching.

With over 23 years of experience, Jo’s career has spanned finance, operations, project management, optimisation, learning and development, and leading project teams. She has worked both locally and internationally, supporting organisations in achieving efficiency and effectiveness across industries such as financial services, health services, information technology, insurance, media, and retail.

Jo has held significant roles at Deutsche Bank, Adecco Group, and the Australian Association of Social Workers. Known for her love of challenges, Jo is dedicated to contributing to her team’s efforts in delivering development opportunities that enhance engagement and help people and organisations reach their full potential.

Richard Clarke

Greer O’Brien

Joanne Hall

Richard Tootill

Richard is the Sales Manager at Peeplcoach, bringing over 10 years of experience in solution sales across leadership development and coaching, recruitment, and SaaS technologies within the IT and digital space. He has worked in various environments, including global corporates, fast-growing companies, and start-ups, with a career that includes roles at Oracle, Seek, and Elmo Software. Richard has primarily focused on driving new business in the B2B space, working with some of Australia’s most well-known organisations, including Fortescue Metals Group, Multiplex, Commonwealth Bank, Arup, and Austrade, to name a few.

In all his roles, Richard’s passion lies in solving challenges for both individuals and organisations, helping people be the best they can be. His goal is to help organisations succeed and empower individuals to reach their full potential by finding what they love to do.

Richard also holds a Bachelor of Business from Griffith University (QLD), majoring in sports management.

Michael Rainey

Michael is the Projects Manager at Peeplcoach, responsible for ensuring seamless operations across various processes, from launching new coachees on the platform to onboarding Peeplcoach coaches and introducing new content.

With over 25 years of experience, Michael’s career has spanned roles in finance, human resources, training, learning, and organisational development. He has contributed to the success of organisations such as CBA, Mercedes-Benz, Lumo Energy, Yarra Valley Water, and Bendigo Kangan Institute of TAFE. Michael holds a Bachelor of Education & Training, a Bachelor of Psychological Science (Honours), a Graduate Certificate in Human Resource Management, and a Graduate Diploma in Psychological Studies.

His mission is to develop and enable others, equipping them with the tools they need to reach their full potential while driving the organisation’s success.

Email: Michael.Rainey@peeplcoach.com

Faydra Khor

Zana Ballantyne

Zana is both a Master Coach and the Head of Coaches at Peeplcoach. In her role, she is responsible for recruiting, growing, developing, leading, and inspiring a team of passionate and talented coaches, all dedicated to making coaching accessible to everyone.

She currently leads a team that supports emerging and developing leaders across Australia, New Zealand, the US, the UK, Singapore, and India. With over 25 years of experience in people development and leadership across continents, Zana is renowned for driving people-led organisational change and cultivating positive cultures. Her expertise includes working with various levels of leadership in industries such as GE, Coles, ADP, Consumer Affairs, and Ambulance Victoria, with notable clients including Asahi, Dulux, Inghams, Latrobe City Council, and Bega.

Zana holds a Post Graduate Certificate in Organisational Coaching and is a qualified practitioner and facilitator in DISC, LSI, GSI, NLP, MBTI, and Change Acceleration Process (PCI). As a leader and coach, she excels in uncovering hidden challenges and empowering individuals to find actionable solutions. Her approach prioritizes building capability, creating high-performing teams, and driving sustainable business results through people-first strategies.

Virginia Aldred

Vanessa Jones

Susan Williams

Sean O’Leary

Sarah Bateman

Rob Watson

Natalie Hormann

Margaret Haarhoff

Kaye Brett

Karin Moorhouse

Joanna Clary

Jinn Kan

Jillian Bolger

Jess Ferguson

James Chisholm

James Chisholm is the Co-Founder and Executive Coach at Peeplcoach. He brings over 25 years of business leadership experience performing roles in executive general management, board directorship, business development, leadership coaching, team facilitation and operational leadership. His career has covered multiple industries including building technology services, asset management, renewable energy and not-for-profit with large multi-national corporations, private companies and SMEs including Honeywell and WATCH Disability Services. 

With extensive local and international experience, James has led teams of up to thousands of employees across varied countries and cultures and enjoys working with diverse groups of people to achieve outcomes with a sense of purpose and alignment with his personal values. In addition to his leadership and executive coaching work, James frequently facilitates leadership and executive team sessions where constructive culture and high performance are the desired outcomes.

Hilary Gustave

Felicity Brown

Evie Suss

Dr Simone Boer

Doug Binns

Dianne Flemington

Di Kanagalingam

Bryan Carroll

Charlotte Rush

Christine Khor

Christine Khor is CEO, Founder and Lead Coach at Peeplcoach and is passionate about the role that coaching has in accelerating performance for individuals, teams and organisations and making Peeplcoach the best leadership coaching platform she can!

Before becoming an executive coach and launching Peeplcaoch, Christine started her career In marketing management with global organisations such as Kraft Foods, Hallmark Cards and Simplot Australia.

After a successful career leading teams, Christine started the recruitment and executive search company Chorus Executive where she has partnered with hundreds of organisations and thousands of individuals offering recruitment, search and business, career and executive coaching services. In 2020 launched Peeplcoach with the mission to make coaching accessible to all employees within an organisation, not executives only.

As an executive coach at Peeplcoach, Christine partners with all levels of employees within an organisation from emerging leaders to executives. With her c-suite and start-up business and leadership experience Christine brings a commercial and pragmatic approach to her coaching sessions. Christine holds several qualifications including a Bachelor of Arts, Master of Business Administration, Post Graduate Diploma in Policy Studies and Graduate Diploma in Organisational Change and Executive Coaching.

Clare Phelan

Dawn James

Deb McDonald

Bronwyn Rose

Anne Basia

Anglea Zegir