To make a business case for mentorship— any initiative for that matter— you need to show the financial return on investment (ROI).
However, assessing the ROI of Human Resources (HR) and Learning & Development (L&D) initiatives is a bit more nuanced. These involve more intangible outcomes such as improved retention, engagement, and knowledge sharing.
Let’s consider how to measure the ROI of a mentoring program. Since there are no direct financial gains associated with mentorship, it can be challenging to quantify the return on investment. But it’s not impossible.
In this article, we’ll show you the key metrics you need to measure and maximize the ROI of their mentoring programs.
Why is it important to track the impact of your mentorship program?
There are two main reasons why it’s so important to measure the ROI of your mentoring program.
- The first is that it will be hard to justify the budget you’ll need to run the program if you don’t have concrete numbers to back it up. None of us like to invest our time and resources into something without knowing if it’s worth the effort. It just makes sense to measure the impact of any initiative that uses up valuable resources so you can focus your efforts on those that are delivering the best results.
- The second is that tracking the ROI of your mentorship program not only helps you to understand whether it is something you should continue investing in, but also provides valuable insights into how you can improve the program.
Therefore, the benefits of calculating the ROI of your mentorship program are clear. FOr starters, it helps you. By crunching the numbers and gathering feedback, you’ll gain more insight into your program. This will help you make it better.
Likewise, you’ll also earn continued investment so you can scale your program.
Now that we’re on the same page with the importance of measuring ROI, lets unpack what to actually measure and how to do it.
Key metrics for measuring the ROI for your mentoring program
As promising as your mentoring proposal may look, anecdotes and statistical data alone won’t be enough to convince your stakeholders of its effectiveness. Often, similar case studies are used to benchmark the performance of a mentoring program.
Even though evaluating your mentoring program is not an exact science, there are some indicators you can use to get a better sense of how successful your program is and how much of an impact it has on your organization.
The following key metrics will help you understand if your organization’s mentorship efforts are paying off:
Below, we’ll define the key metrics and why they’re important in measuring ROI. We’ll also look at examples of each metric and explain how these metrics show the success of your mentoring program.
Mentorship’s impact on employe engagement
Only about 33% of employees are engaged in their work, according to Gallup. This means that two-thirds of employees feel unmotivated, unfulfilled, and disconnected from the organization and may not be contributing as much as they could be. Is this true at your organization?
More importantly, research shows that disengaged employees can cost organizations between $450 to $550 billion per year in the US.
How can we change this? With a well-structured mentorship program, you can help increase employee engagement levels and ensure that everyone feels supported and valued.
Mentorship provides an avenue for more meaningful connections between mentees and mentors, which helps them develop strong relationships that foster growth, accountability, and support.
By tracking parameters and tools such as absenteeism rate, Employee Net Provider Score (eNPS), and employee engagement scales, you can measure the impact of the mentorship program in terms of increasing workplace morale.
Mentorship’s impact on employee retention
The most common reasons for employee attrition are lack of career advancement opportunities, failure to recognize employees’ efforts and achievements, and poor relationships with supervisors.
Studies show that the average cost of replacing one employee can cost up to one-half to two times its annual salary. If your turnover rate is high, it can be a major drain on your finances, not to mention, its effect on productivity, morale, resources, and collective knowledge.
How can we combat this? By connecting employees with mentors. A mentor can provide insights on how to succeed in the organization, guidance in navigating career paths, and support when employees are feeling overwhelmed or burned out, among others.
As such, mentoring provides employees with a sense of purpose and belonging within the organization, which helps prevent them from leaving prematurely or seeking better opportunities elsewhere.
Measuring employee retention involves tracking metrics such as employee satisfaction, voluntary turnover rate per department, and average employee tenure to reflect the success of the mentorship program in fostering a sense of loyalty and purpose within the organization.
For a quick calculation of mentorship’s impact on your turnover costs, use our turnover cost calculator.
Mentorship’s impact on career advancement
One of the main goals of a mentorship program is to provide employees with the opportunity to grow and develop professionally.
In a Gartner study, mentees are five times more likely to get promoted compared to those who are not in a mentorship program.
Mentoring helps employees gain new skills, build their networks, become better communicators, and increase their visibility within the organization.
Some of the key indicators that the mentorship has been successful in helping employees climb the corporate ladder are career path ratio, employee promotions, and job performance scores.
Mentorship’s impact on diversity, equity, and inclusion
From the C-suite to entry-level positions, diversity, equity, and inclusion (DEI) are essential in any workplace. Research suggests that a diverse workforce increases organizational performance by 12%.
Another study reveals that compared to other DEI initiatives like mandatory diversity training, mentoring was more effective in increasing minority representation among managers by up to 24%.
Mentorship programs can help organizations build a more diverse environment by providing mentees with access to role models that share similar backgrounds or experiences they can relate to.
This type of support system helps create connections between employees and provides them with more opportunities that may have otherwise been unavailable due to a lack of representation in the organization’s leadership team.
Metrics such as workforce demographics, employee resource group participation, and pay equity, can give you an idea of the progress your organization is making in terms of creating an equitable and inclusive environment.
Best practices for measuring your program’s impact: dos and don'ts
Significant changes in employee engagement, retention, career advancement, and DEI don’t happen overnight, but implementing these best practices for measuring your program’s impact over time creates a clear path to success.
- Use mentoring software like Together when launching your mentorship program to automate the process of tracking your preferred metrics.
- Make sure to set benchmarks for the metrics in your area of interest (e.g. retention) and regularly compare your results to those figures.
- Encourage feedback from mentors and mentees through regular check-ins and surveys so you can get an objective evaluation of the program’s impact.
- Rely solely on quantitative results and neglect qualitative feedback from the participants.
- Focus too much on short-term ROI metrics instead of the long-term impact and sustainability of the program.
- Ignore the importance of setting up an effective system for data collection and analysis.
It takes a lot of your time and effort to launch an effective mentorship program. If done well, it will likely have an incredible impact on your organization. Don’t let a lack of visibility into the results be the barrier to scaling your mentorship program.
By tracking the right metrics, HR and L&D professionals can gain quantitative and qualitative perspectives into how their mentoring efforts are making a difference in employee engagement, retention, performance, and DEI goals.
For more details on the what and how of documenting your mentorship program’s ROI, download our white paper, Measuring the ROI of mentoring.
Likewise, if you’re ready to launch a world-class mentoring program, learn more about our mentorship platform. Mentorship programs on our platform leverage our advanced pairing algorithm to create perfect matches at scale, keep track of mentoring relationships with real-time reporting, and have dozens of templates and resources for mentoring relationships.
Schedule time with our team to get a personalized demo.