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TRAINING ROI

General Information

Intro

Management is questioning proposals by the HR department to increase spending on training. You know that

well$-$trained employees are more productive, but how do you quantify that? In this assignment you will

compare the cost of training with the savings from productivity improvements because of training. By

calculating the return on investment $($ROI$),$ you will gain a better understanding of the value of allocating

budget resources to training.

Context

The company spends $$8,400$ per quarter in wages for each Level $1$ employee. Productivity is currently $209$

units per worker, requiring $493$ Level $1$ employees to meet the production goal of $103,000$ units. By spending

$$60,000$ on training, it is projected that productivity can be increased $2\%.$

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Questions

Question $1$

What is the new productivity if it increases $2\%$ over the current $209$ units per worker?

Response

units per worker

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Question $2$

How many employees will be required to meet the production goal of $103,000$ units at the new

level of productivity? Since you can$$t have a fraction of a worker, remember to round up to the

nearest whole worker.

Response

workers

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Question $3$

What is the savings from the reduced number of Level $1$ employees?

Response

$

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Question $4$

Use the following formula to calculate the return on investment from the training expense:

ROI $=100\%\backslash$times $($Savings $$ Expense$)/$ Expense

Response

$\%$

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Question $5$

Is the investment in training worthwhile?

Yes

No

Choices

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Question $6$

Besides reduced cost of production, what other benefits, if any, might be gained from training?

Reduce turnover

Increase diversity

Improve morale

Increase quality

Choices