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Measuring The Return On Investment Of The Hr Function Traditionally measuring a Return on Investment followed a fairly standard calculation method - look at the profit generated and divide that by the value of the assets being utilized in creating that profit. Pretty simple until you start applying the calculation to non-profit generating divisions such a HR. Using traditional ROI we would logically conclude that the HR function needed to be cut but we know that HR provides value to the business. So if we know that value is being created by the HR function how do we get to that value and how do we then manage HR activities to maximize that value for the benefit of the business as a whole?

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Measuring The Return On Investment Of The Hr Function
Traditionally measuring a Return on Investment followed a fairly standard calculation method - look at the profit generated and divide that by the value of the assets being utilized in creating that profit.

Pretty simple until you start applying the calculation to non-profit generating divisions such a HR. Using traditional ROI we would logically conclude that the HR function needed to be cut but we know that HR provides value to the business. So if we know that value is being created by the HR function how do we get to that value and how do we then manage HR activities to maximize that value for the benefit of the business as a whole?

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