Human Investment Ratio

Example – Saratoga Ratio: Human Investment Ratio - Linking Human Capital to Shareholder Value

The Human Investment Ratio (HIR) indicates the added value delivered by the workforce, i.e. the return to the organisation for every unit invested in compensation and benefits. Unlike simply measuring profit, the HIR contains all the major business drivers where improvement may be essential as a means of increasing profit, and therefore is a core measure of organisational effectiveness.

What is your return for every Rand spent per employee?

Revenue Revenue by Business Unit Revenue by Country or Region Revenue by Product Line Revenue from new products and services.		Non-wage cost Material Costs Financing Costs Facilities and Overhead Costs Cost of Outsourced Costs Training Costs?
Insert your values in the below fields and click "Calculate HIR". - x   Rand spent per employee
FTEs FTEs by Business Unit FTEs by Country or Region FTEs by Function Full-time v. Part-time Temps & Casuals Contract Workers Utilisation of Overtime Management Structure Excess Absence Control over Headcount and Recruitment process		Average Remuneration Salaries and Wages levels Performance Related levels Attendance Related Pay Benefits Structure Social Costs

Kindly note that the accuracy of this measurement will be dependent on the definitions used for each of the variables. Saratoga has precise definitions which we provide to clients.
The desirable target position of the HIR clearly differs between organisations and within organisations, and is affected by both macroeconomic conditions and the phase of the business cycle in which the organisation operates.
Depending on the organisation's current financial and commercial position, the ratio will be more sensitive to some elements than others. We recommend the analysis of the HIR in conjunction with other Saratoga metrics.