ROI Training Program

							                 Calculating the PRO-Forma ROI for Investing in a Training Program
** Enter values in grey-shaded cells, enter "0" if no benefit or cost for the year

First: Estimate the Annual Benefits                                                         Template     Example
Benefits in year one (cost reductions or revenue increase due to the training)                             $300,000

Benefits in year two (cost reductions or revenue increase due to the training)                             $500,000

Benefits in year three (cost reductions or revenue increase due to the training)                           $500,000

Benefits in year four (cost reductions or revenue increase due to the training)                                 $0

Second: Estimate the Annual Costs
Costs in year one (costs incurred in deploying the skills learned through the training)                    $100,000

Costs in year two (costs incurred in deploying the skills learned through the training)                    $150,000

Costs in year three (costs incurred in deploying the skills learned through the training)                  $100,000

Costs in year four (costs incurred in deploying the skills learned through the training)                        $0

Third: Estimate the Investment
Dollars spent to develop/buy and deliver the training program                                              $100,000

Finally: Calculating the Pro-Forma ROI for Investing in the Training
Interest rate you would borrow money at for this investment                                                    15%
    (Input as whole value i.e. 10% inputted as 10)
ROI = (∑[Annual Benefits - Annual Costs] ÷ Investment) X 100                                   #DIV/0!        702%




   The Profit Ability Group, Inc.                                                                                     Business Training Library
   ray@theprofitabilitygroup.com                                                                                           info@bizlibrary.com
   (636)527-7111                                                                                                                (888)432-3077
           Calculating the PRO-Forma ROI for Investing in Training to Reduce Employee Turnover
      ** Enter values in gray-shaded cells

      First: Estimating the Cost of Turnover                                                     Template     Example
  a. Number of employees                                                                                          1,000

  b. Total payroll (including benefits) of employee population                                               $45,000,000

  c. Average salary (including benefits) of employees = (b ÷ a)                                    #DIV/0!      $45,000

  d. Number of employees voluntarily leaving the company annually                                                   200

  e. % annual turnover = (d ÷ a)                                                                   #DIV/0!          20%

   f. Estimated cost to replace an employee as % of salary (enter as a whole number)                              100%

  g. Bottom line impact of voluntary turnover = (g X d X c)                                        #DIV/0!    $9,000,000

      Next: Calculating the Pro-Forma ROI for Investing in Reducing Turnover
   i. Retention Goal: targeted % reduction in employee turnover rate (enter as a whole number)                      20%

   j. Turnover rate if Retention Goal achieved = [e X (1 - j)]                                     #DIV/0!          16%

  k. First year's dollar savings in turnover cost if Retention Goal achieved = (j X h)             #DIV/0!    $1,800,000



The Profit Ability Group, Inc.                                                                                        Business Training Library
ray@theprofitabilitygroup.com                                                                                              info@bizlibrary.com
(636)527-7111                                                                                                                   (888)432-3077
   l. First year's estimated cost to deploy the skills learned through the retention training               $200,000

 m. Second year's dollar savings in turnover cost if Retention Goal achieved = (j X h)           #DIV/0!   $1,800,000

  n. Second year's estimated cost to deploy the skills learned through the retention training               $200,000

  o. Third year's dollar savings in turnover cost if Retention Goal achieved = (j X h)           #DIV/0!   $1,800,000
        (Enter "0" if impact of retention training is expected to last no more then two years)

  p. Third year's estimated cost to deploy the skills learned through the retention training                $300,000
        (Enter "0" if impact of retention training is expected to last no more then two years)

  q. Dollars spent to develop/buy and deliver the retention training program                                $400,000

      Interest rate you would borrow money at for this investment (enter as a whole number)                     10%

      ROI = (∑[Annual Benefits - Annual Costs] ÷ Investment) X 100                               #DIV/0!       976%
          = (NPV[(k-l)+(m-n)+(o-p)] ÷ q) X 100




The Profit Ability Group, Inc.                                                                                     Business Training Library
ray@theprofitabilitygroup.com                                                                                           info@bizlibrary.com
(636)527-7111                                                                                                                (888)432-3077
The Profit Ability Group, Inc.   Business Training Library
ray@theprofitabilitygroup.com         info@bizlibrary.com
(636)527-7111                              (888)432-3077
The Profit Ability Group, Inc.   Business Training Library
ray@theprofitabilitygroup.com         info@bizlibrary.com
(636)527-7111                              (888)432-3077