Why You Don’t Always Need to Measure ROI in Dollars

HR professionals tasked with measuring the ROI of benefits are in a difficult position. Most believe that an attractive benefits package leads to healthy, engaged, and productive employees who will never leave their jobs. The problem is that they can’t prove it.

That’s because not all ROIs are the same. There’s the “hard ROI,” and then there’s the “soft ROI.” Hard ROIs are data-driven and easy to measure in units like dollars and time.

Soft ROIs, on the other hand, are not data-driven and are difficult to quantify and measure. This causes some leaders to believe that soft ROIs have less value to the organization. They couldn’t be further from the truth.

Taking a look at some of a few popular benefits reveals just how important soft ROIs are to the development of the employee and the success of the organization.

Matching 401(k) Plan

Whether you match your employees’ 401(k) contributions based on a percentage of their contribution or up to a specific dollar amount, it’s understandable that you’d want to measure the ROI of your investment. It’s an expensive benefit. But, there’s really no way to measure the hard ROI.

Even so, there’re at least two major soft ROIs that spring from your contributions. First, you’re making your employees more responsible, specifically for their finances. And, financially responsible employees are more likely to be responsible in other areas of their work and home lives.

Second, your contributions reduce stress. According to a 2017 Gallup poll, 54 percent of Americans worry about not having enough money for retirement. Knowing that they’ve committed to saving and investing – with your financial support – your employees can sleep better at night and be more engaged at work.

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Work from Home

Allowing your employees to work from home is a leap of faith. You’re trusting them to get their work done while having the same, or higher, level of productivity that they would have if they were in the office.

While searching for a hard ROI you can measure things like how much you’ve reduced overhead expenses. However, it’s better to appreciate that, in addition to adding to your employee’s job satisfaction, you are giving them the opportunity to learn how to be more responsible, specifically with their time. Who doesn’t want a more responsible employee?

Wellness Programs

Typically, wellness programs are offered to control healthcare costs and improve employee productivity. Sure, you can gather data about decreased absenteeism and medical claims, but the hard ROI is still uncertain.

It’s better to look for the soft ROIs associated with wellness programs. Though unmeasurable, the benefit reduces the health risks of those who participate. Also, there are group components to wellness programs that improve comradery and team effectiveness.

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Lunch as a Benefit (LaaB)

If you offer a lunch program, you may be tempted to try to measure the resulting productivity. That makes sense. Even the World Health Organization says that adequate nourishment can raise overall productivity levels by 20 percent. Is your lunch program raising your employees’ productivity by 20 percent? It could be higher. It could be lower. Either way, how would you know?

What you can know is that offering LaaB results in several soft ROIs. One is increased collaboration through the breaking down of silos. Enjoying food together is a basic human expression of community. It has the power to create bonds between people who may have never otherwise socialized.

Another soft ROI is the development of effective communication. When coworkers eat together and discuss their lives or their work, they have the opportunity to socialize in a way that involves articulating themselves and being good listeners. These are excellent traits for leaders.

Tuition Reimbursement

This is one of those benefits where there is no reason to even try calculating a hard ROI. What you are doing with this benefit is improving the lives of your employees and increasing the talent of your workforce. Your commitment to your employee’s education is a demonstration that you care about them. Ultimately, you get employees with a high morale who are preparing themselves for leadership roles.

You Can Manage What You Can’t Measure

One bit of outdated workplace dogma is, “If you can’t measure it, you can’t manage it.” No one is saying not to attempt measuring outcomes. The point is to value outcomes that are not measurable with a hard ROI. Creating well-rounded, educated, healthy, leaders is an outcome that every organization should appreciate.

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