The ROI (Return on Investment) of Career Development: A Case Study

Trends such as a changing workforce with greater diversity, a shrinking leadership pipeline, increased globalization, and rapid technological advances are driving organizations to take proactive steps for career development and talent management. To accelerate the development of leaders, organizations must carefully select development methods and invest development dollars wisely. In fact, senior executives are continuing to push for more accountability with human resource expenditures given the rising costs of these solutions and the intensive competition for the budgets associated with them. To that end, many best-practice organizations have developed balanced evaluation criteria, up to and including return on investment, to gauge the effectiveness of leadership development programs. This case study shows how the ROI process was used to evaluate the impact of a career development initiative implemented as a pilot talent management strategy for increased efficiency in a dynamic manufacturing environment. Results showed a positive link between participants’ on-the-job application of learned skills/knowledge and desired business results. Findings from this study support research showing that successful career development efforts must be implemented with a systems view that occurs in the context of ongoing, real-time work initiatives that are closely tied to strategic business goals. Critical success factors that have implications for HR professionals seeking to develop value-added career development solutions include: beginning with a thorough needs assessment; securing support and involvement from senior management; linking efforts to strategic objectives; integrating continuous evaluation processes; involving line managers in programme design; and piloting the programme before launch.