Free Template for Human Capital ROI Calculator by StaffAny
This free template allows you to assess the financial value of your employees compared to the amount spent on them.
How Can Our Template Help You?
- Helps determine if you are recruiting and retaining the right candidates in your business.
- Helps determine if employees are receiving optimal training and skill development.
- Enable employees to be placed in the best environment and role for personal and organizational success.
- Helps determine if employees are receiving the right leadership support and management advice.
Do you find it useful? Share it with others and let them know how you make your human capital ROI calculation.
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Frequently Asked Questions
Human capital (HR) is an intangible asset that consists of the economic value of employees’ experience and skills. “Capital” here refers to assets such as knowledge, skills, health and education. There is a clear differentiation between human capital and human resources.
Return on Investment (ROI) is a key performance metric that can be used to measure the efficiency or profitability of an investment and to evaluate the effectiveness of different investments. ROI attempts to directly measure the amount of return on a specific investment relative to the cost of the investment.
ROI is a popular metric due to its flexibility and simplicity. In short, ROI can be used as a basic metric of investment profitability. This could be the ROI of an equity investment, the ROI a business expects from a plant expansion, or the ROI of a financial transaction.
Human Capital ROI (HCROI) represents the financial value generated by employees through expenses on them (related to recruitment, employee compensation, talent management, training, etc.). It is a strategic HR metric that shows the value contributed by employees individually and collectively. This metric appropriately reflects the value of an organization’s human capital.
The formula for human capital ROI is revenue minus non-human capital expenditure divided by human capital expenditure.
To effectively manage and develop human resources, businesses should implement strategies that give priority to employee development, and analyze data that should be used to make human resource management decisions and build a culture that values and supports employee well-being.