The ROI (Return on Investment) of Career Development: A Case Study‪.‬

Introduction: Why Evaluation and ROI? The use of ROI (return on investment) has emerged as an essential part of workplace learning, human resource development (HRD), and programme evaluation in both private and public sector organizations around the globe. Benchmarking studies show it is a fast growing metric--70-80 per cent of organizations have it on their wish list (Phillips and Phillips, 2007). Many best-practice organizations have already developed a balanced set of scorecard measures and evaluation criteria, up to and including return on investment, to measure the effectiveness of human resource development programs. For example, the American Productivity and Quality Center reports that best-practice organizations always assess the impact of their leadership or career development processes and have high concern for the perceived value of their human resource development efforts (Phillips and Schmidt 2004). Another reported study by Linkage, Inc. (Phillips and Schmidt, 2004) describes 'continuous evaluation' as the second most important critical success factor for leadership or career development. This is not surprising given the rising costs of human resource development solutions and the intensive competition for the budgets associated with those projects. For example, the annual direct cost of organizational learning and development is estimated to be over $100 billion in the United States alone. A few large organizations spend as much as $1 billion every year on corporate learning and development (Phillips and Schmidt 2004). With numbers like these, learning and development is no longer considered a frivolous expense; rather, it is regarded as an investment, and many executives expect a demonstrated payback from those efforts in the form of improved organizational performance and measurable results.