Human Capital ROI Calculator is an excel template with predefined formulas that will help calculate Human Capital ROI against the money spent on pays and benefits. Moreover, this template consists of a simple calculation as well as a detailed calculation bifurcating each head.
What is Human Capital ROI?
Human Capital ROI or HCROI is an HR Metric that evaluates financial value added by the workforce against the money spent on them in terms of salaries and other benefits.
Human Capital ROI Formula
HCROI = Revenue – Non-Human Capital Expenses / Human Capital Expenses
Where:
Non-Human Capital Expenses = Operating Expenses – Human Capital Expenses
Human Capital Expenses = Fixed compensation(salaries) + Variable compensation + Benefits + Indirect cost
Revenue = The adjusted revenue after deducting the cost of capital, depreciation, etc.
Human Capital Return On Investment Calculator Excel Template
We have created a ready-to-use excel template for the Human capital ROI Calculator with predefine formulas.
Moreover, In this template, you just have to enter the numbers against the respective cells and it will automatically calculate the HCROI for you.
Additionally, if you don’t know the amounts of revenue, non-human capital expenses, or human capital expenses, you don’t need to worry. You can enter the direct figures from annual reports of your company or books of accounts and derive same.
How To Use The Human Capital ROI Calculator Excel Template?
It is very simple to calculate the HCROI in this template. There are 2 sections in this template:
- HCROI
- HCROI Detailed Calculations
1. Human Capital ROI Calculator
In this section, you require only 3 details to derive the HCROI.
- Revenue
- Non-Human Capital Expenses
- Human Capital Expenses
Just enter the amounts and it will calculate HCROI for you. However if you don’t have these figures directly available then you can use the next section.
2. HCROI Detailed Calculations
Thus, The Revenue is required to calculate the HCROI is the adjusted revenue after deducting the cost of capital, depreciation, interest, taxes, etc.
Similarly, Non-Human capital expenses are expenses except that used for salary, compensation, and other benefits for employees.
Whereas, Human Capital Expenses are sum of salaries, compensation, benefits, and other indirect cost used for employees.
Furthermore, all 3 sections have display differently and when you enter the respective figures it will automatically total each of them.
Lastly, using these figures it will calculate the Human Capital ROI according to given formula.
What are the uses of HCROI?
Here are some uses of HCROI:
- Therefore, To know ratio of income derived against the total employment costs.
- Somehow To identify gaps in human capital.
- Thus it helps evaluate which external or internal factors influence the productivity of their workforce.
- Also, Helps to know whether the right leadership and managerial support are available to the employees to accomplish and align with the company’s business objectives.
Thus, This template can be useful to Business Analysts, HR managers, business owners, HR assistants, and to HR Professionals.
