training return on investment and organization lost one to five employees last y
ID: 434809 • Letter: T
Question
training return on investment
and organization lost one to five employees last year at a cost of $5,000 each value is divided from cost to a rehire and fill opening as well as loss investment in the employee you suggest that a one-time investment in a training program costing $250,000 up front will reduce turnover by 50% calculate the following numbers using historical figures as your assumptions
a Total savings that the program stands to create
b Net savings the first year in place
c Return on investment after one year
d Return on investment after two years
e Return on investment after six months (assume half of the employee's/but all of the cost
Explanation / Answer
Add up to reserve funds that the program stands to make = No. of workers x cost per representative x half
= 125 x5000 x50%
= $312,500
Net reserve funds the primary year set up = Total investment funds – cost of program
= $312,500 - $250,000
= $62,500
Degree of profitability following multiyear = net reserve funds/Cost of program
= 62,500/250,000
= 25%
Investment funds in the second year =125 x5000 x50%
= $312,500
Degree of profitability following multiyear = ($312,500 + $62,500)/$250,000
=150%
Degree of profitability following a half year = $62,500 x50%/$250,000
=12.50%
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