Here at Merito Group, we dedicate one morning a week to training our workforce on a range of topics to maximize their potential, but how common is this in a typical office?

What company would spend thousands — or even millions — of dollars, year in and year out, without knowing the return? When it comes to training and workforce development, lots of them.

In a 2014 survey, 55% of executives said a major constraint to investing in training was that they did not know how to measure success. Almost half (49%) said that it was difficult to ensure a return on investment (ROI). And in another survey, 87% said they cannot calculate quantifiable returns on their learning investments. In short, companies have little idea whether they are spending too much or not enough. This is a particularly acute issue at the entry level, where employers have come to accept that high levels of attrition and low levels of productivity and quality are normal.

The reasons for this lack of understanding are not difficult to identify. For a start, employers don’t often collect or analyze individual performance data. Nor do they quantify the cost of high employee turnover. But it is possible to do better.

The business model of Generation, a youth employment nonprofit founded by McKinsey & Company, where we both work, is based on that assertion. Launched in 2015, Generation works in five countries (India, Kenya, Mexico, Spain, and the United States). It has trained and placed 11,000 graduates into entry-level jobs in four sectors: health care, tech, retail/sales, and skilled trades.

Once these graduates are on the job, Generation measures their performance relative to peers. The metrics they track include: productivity, cost savings in recruitment and training, quality, retention, and speed to promotion. These metrics can be converted into an estimate of ROI for the employer. Employers pay Generation based on the ROI of the graduates they hire. Ultimately, their aim is that by proving the economic value of their training, Generation can charge employers enough to be entirely self-sustaining.

One key to their training is to identify ahead of time the challenges that lead employees to leave positions, which is costly for employers. By tailoring training to those challenges, Generation has reduced turnover, therefore saving employers money.

To read more on Generation’s fascinating experiment on training recruits, please read Ali Jaffer and Mona Mourshed’s article from the Harvard Business Review here.

Merito Group is a small women-owned business providing excellence in outsourced talent acquisition solutions including retained executive search, RPO, and consulting services. Looking to hire exceptional talent? Contact us by email or 703-734-6340. To view our current career opportunities click here.