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How to measure the business value of skill development

Posted by Farron Levy on Mon, Nov 07, 2011 @ 08:42 PM


Once you have isolated those volunteer or pro bono activities that generate new, job-relevant skills among your volunteers, here are three ways to capture their business value:

  1. Monetize productivity impact The arithmetic is simple, but requires some knowledge of the individual’s specific job functions (often easily provided by an HR department).  In brief, by estimating the efficiency gained in performing a specific task by either an individual or team (e.g., how many hours saved over the course of a year in, say, project management), you can use the business rule of thumb that the value of employees’ time is (at least) equal to their salary, and monetize the saving as follows:
    • Hours saved per task (e.g., 5 hours) * frequency of task (e.g., 12 times a year) * average salary (e.g., $35 per hour) = $2,100 productivity gain per person

  2. Monetize avoided cost.  How much would it cost to have employees trained on the skills that were gained through the volunteerism or pro bono experience?  These component data also tend to be easily available from an HR department:
    • Trainer fee (e.g., $1,000) + hours of training (e.g., 5 hours) * average employee salary (e.g., $35 per hour) * number of employees (e.g., 10) = $2,750 in avoided training costs

  3. Track skill gains.  Though not a monetary or outcome-based metric, specifying the type and degree of skills developed can go far towards conveying value among key stakeholders (particularly HR departments and senior leadership) who understand the importance of skill development as a driver of business value.  If possible, access your company’s internal skill-proficiency profiles (i.e., formal or informal frameworks of what skills are expected at various staff levels) to guide what skill categories to track.

    Example Skill Development Categories

    Example Skill Development Categories

    Example Skill Gains
    • Staff-level proficiency (e.g., associate-, manager-, senior manager-level)
    • Relative skill gains (e.g., substantially beyond, upper end/somewhat beyond, or incremental to employee’s staff level)

NOTE: Don’t automatically go for the most precise measurement option.  First find out what level of precision is required among the stakeholders you are reporting to, as often some level of “ballpark” estimation is sufficient (and far less demanding) than the option you might otherwise assume is required.


Tags: CSR Metrics, Measuring business value, Measuring Volunteerism

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