So you are thinking about starting a mentor program but you need to convince management that it will add value to your organization and ultimately improve your bottom line. Here are some easy steps to help you start to better understand the ROI (return on investment) of your mentoring program:
1) Use existing research to support your decision.
2) Evaluate the success of your program using simple metrics.
3) Measure the long-term impact to your bottom line.
Mentoring ROI: A Case Study
First, let’s look at some research that has already been done. A study conducted by a large high tech company showed that mentoring programs improve retention and productivity of both mentees and mentors. The study, conducted over 14 years showed:
- Retention increased for both mentees and mentors by 20 points or more.
- Salaries increased by more than 20 points for both mentees and mentors.
- Participants were 5x more likely to be promoted.
Mentoring Metrics: Short-Term ROI
Next, let’s look at different ways to evaluate the success of your mentoring program. As the administrator, you need to set clear goals for your program and have ways to measure those goals. Mentoring software will help you more easily track these metrics.
Following is a list of goals that you should consider measuring:
Number of Registrants: Larger organizations should break this number down by location, function, school, or whatever makes sense for your organization. Understand who is being invited but not registering and who is registering but not committing to a relationship.
Number of Matches: Number of matches is a straighforward number to track over time.
Number of Minority Participants: This is key if diversity is a goal.
Number of Participants that Complete Milestones: Your mentoring program should be broken down into milestones that should be completed during the relationship. You want to monitor the number/ratio of participants that complete their milestones.
Number of Action Plan Goals Completed: Each mentee should fill in an action plan before the start of the relationship. Ideally this action plan is online so that administrators can monitor progress on these plans.
Mentoring Metrics: Long-Term ROI
Finally, let’s look at key metrics that will help you measure the ROI of your mentoring program over time. This part will require you to integrate with your HRMS system and should be looked at over at least a 3-year period. When you measure these metrics, keep in mind that you want to measure those that participate versus those that do not participate to get a measure of the difference.
Retention: Calculate the turnover rate of those participating in your mentoring program versus those not participating. Once you understand the difference between the two numbers you can do a quick calculation of the ROI of your program. For example:
|% Decrease in Turnover (conservative estimate)||1%|
|# of Employees in Program||500|
|Cost to Hire (assume avg salary of $50K and 150% to re-hire)
Given that it is so expensive to hire new employees, even a modest decrease in turnover will save your organization a considerable amount of money and more than pay for the cost of administering the program.
Salary or Title Increase: This measure helps approximate increases in productivity.
Engagement / Productivity : Administrators should periodically send a survey to all participants asking questions such as:
- How likely are you to recommend to others?
- Do you feel more connected to your organization?
- Are you better able to achieve business goals?
- Did program increase your effectiveness as a manager?
It is also important to gauge the engagement of participants versus non-participants. On your organization’s overall employee survey, you should ask survey takers if they participate in the mentoring program. Then you can measure the engagement of those that participate versus those that do not participate.
Mentoring is an effective way to engage employees, improve productivity and reduce turnover costs. As you think about starting your mentoring program, here are a few tips to keep in mind: 1) Plan upfront and create a measurement plan, 2) Use an online mentorng software program that incorporates measurement tools and 3) Periodically review and update your measurement goals. You should easily be able to show your manager the impact of your mentoring program to your bottom line. Good luck!