Is it possible to calculate ROI on HCM projects? The Clarkston HCM ROI model helps make it possible.

1. AKA: “Will this project ever pay for itself?”
Calculating ROI on
HCM Projects

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Return on Investment?
One year?
Three years?
Five years?
Ever?
Never?

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Return on Investment?
Traditionally…
DIFFICULT
to calculate on Human Capital
Management projects.

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Return on Investment?
Does a better
Appraisal Process pay
off financially?

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Return on Investment?
If we
RECRUIT
better, do we
save $?

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What if?
WHAT IFfully loaded
human costs for a 10,000
person company is
$300M annually?

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What if?
WHAT IFa great
HCM solution could
trim the human cost
by 1% annually?

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The Answer...
The
HCM ROI Model

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Step
fullyloadedHR costs
Build out

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Step
the FULLY
loaded
human
cost
salaries
benefits
taxes
training
recruiting
etc.

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Step
Capture
HR
METRICS
Examples:
● Turnover %
● Time to hire
● Cost to hire
● % hired direct
● % hired via agencies
● Cost to train
● Headcount growth
● Benefit cost growth

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Make rationalized
projections about
improvements.
Step

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Can we reduce
cost-to-hire by 2%
with a better
recruiting
system?
Step

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Or trim employee
turnover from
14% to 12%?
Step

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And how do these
projections hold up over a
three year horizon?
Step

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And... how
confident are
we in these
projections of
savings?
Step

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All of these factors come
together in the Clarkston
HCM ROI Model...
Step

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...To establish a
debatable,
challengeable,
arguable, model
of potential cost
reductions...
Step

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But wait… there’s more!
Step

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Our model must
also realistically
consider project
cost!
Step

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Step
Costs,
Costs, &
More
Costs...
Such as:
● Implementation
● Maintenance
● Consulting
● Licenses
● Upgrades
● People

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Step
...With all costs spread
realistically over a
multi-year horizon.

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Step
What are the first
year costs of
implementation,
project team costs,
and license costs?

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Step
What are the ongoing year by
year costs of upgrades,
additional training, etc.?

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Step
The Clarkston HCM ROI model
layers all costs & projected
benefits...

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Step
Result: A model of HCM ROI
for your next project(s).

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Step
It is just that: a model.

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Step
● Debate it.
● Discuss it.
● Challenge it.

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Step
But now we can have
the conversation!

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Want to Learn More?
Contact us today to learn
more about the Clarkston
HCM ROI model
marketing@clarkstonconsulting.com