ROI For Continuing Education - What Is It And Why Is It Important?

If you are a leader in the HTM community, you will be hit with the term “ROI”.  If you are a new or emerging leader, you may be wondering what does “ROI” mean and why is it important.  I want to give you a very quick explanation, factors to consider, and how it benefits your team.

ROI is Return of Investment and is a comparison of profit (or reduction of cost) to an investment.  It is sometimes expressed as a percentage or a set time for 100% return.  Why is this important?  In today’s healthcare environment, every dollar is monitored and justifying a $10,000 training class is often hard to justify to a CFO.  A well-conceived ROI analysis can often help identify opportunities for your team and your facility.  Let’s look at a very simple example.

A contract on equipment X cost $15,000 a year for a comprehensive contract per unit.  Your facility has 2 units.  An OEM class cost $10,000.  Specialized test equipment cost $1,000.  Pay to your employee (4-day class plus 1-day travel), all traveling expenses, and additional OT necessary to cover is $2,500.  Historical data suggests that you average 2 service calls a year on each unit with part and employee investment of $2,000 per unit/service call.

Total contract cost = $30,000 /yr. or $2,500 /mo.

Investment for first year = $10,000 (class cost) + $1,000 (specialized test equipment) + $2,500 (investment to non-production during training) + $8000(estimated continual service cost after training) = $21,500

$21,500 divided by $2,500/mo. = a complete return of investment in 8.6 months

If the expected life of the equipment is 5 additional years, then you can expect to save over $115,000.

A well-conceived and thought through Return of Investment analysis is essential when developing your training budget.  Your C-Suite will appreciate it!