Five Ways to Measure ROI for Team Development

by on May 23, 2024

If you’re a leader considering human capital investment, it can be tough to know how to assess which programs are worth your time and money. Even businesses that place a high value on interpersonal relationships still have bottom lines. You need to know your money is being well-spent.

As you investigate various leadership and team development programs, consider these five ways to evaluate return on investment (ROI).

#1 Reaction: Measures Satisfaction

The first way to measure program effectiveness is through formal evaluation of participants’ reactions. 

As you look for the right program for your organization, ask if the content comes with evaluations after each workshop or module and an overall evaluation at the end. Make sure this information is available to you, not just the company that runs the program, as you want to measure effectiveness yourself.

If a team development program does not have built-in evaluations you will be able to access, consider creating your own. Make sure to use a rating scale as opposed to simple yes or no questions so that you can track trends over time.

#2 Learning: Measures What People are Taking Away from the Program

In addition to satisfaction, another important metric to assess is learning. Your team may have enjoyed the content or workshops, but did they actually find it applicable to their daily professional lives?

Again, some programs will have these types of assessment questions built into their evaluations, while others won’t. It may be helpful to identify some key objectives you hope to accomplish through the program at the outset. That way, you can later see if effective change was made in those specific areas.

For example, if you hope to shorten meetings by decreasing the amount of time spent arguing over decisions, you could ask participants to estimate meeting efficiency at the beginning, middle, and end of the program.

#3 Application/Implementation: Measures Progress After the Program

It’s important to keep measuring program success after the formal portion of the program has ended. This will help you better evaluate if the content was worth the investment. 

Check in with participants after one month, six months, and a year. Ask some of the same satisfaction and learning questions you asked during the program, and see if lasting change has been made. 

Additionally, some programs incorporate peer assessment into their development strategy. While it’s important to help people see their own strengths and constraints, another person’s perspective on our growth and change is often more accurate than our own potentially biased view. 

If peer assessment was part of the program you chose, it will be helpful to continue peer assessment as time goes on and compare the results. To maximize honesty, it’s best to take an anonymous approach. Some team development programs will provide software with this capability.

#4 Business Impact: Measures Change in Business Impact Variables/KPIs

Another piece of evaluating ROI is measuring change in key performance indicators (KPIs). This is similar to assessing if individual participants actually used the training in their work, but focuses more on quantitative measures.

For example, you might want to know your team’s monthly sales growth, amount of overtime hours, or customer satisfaction scores both before and after the human capital investment. Note that the measures you investigate should be those that are impacted by individuals, as a leadership and team development program seeks to better a company by bettering the individuals within it. 

#5 Financial ROI: Measures the Monetary Benefit Gained vs Costs Incurred

Finally, to get a real idea of whether or not your human capital investment was worth it, you will take the measurable changes on business impact and compare them to the costs you incurred by purchasing the program.

Selecting a leadership and team development program is tough, and making sure you invest wisely can feel daunting. If you’d like more guidance on each of the five ways you can measure the effectiveness of human capital investment, download our free guide “Calculating ROI: A Practical Guide for Measuring Return on Human Capital Investments” today.