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The case for a mentoring program is clear: employees who are part of one are five times more likely to see salary grade changes.
The salary grade changes are great for the employee, but they also reflect that added value they bring to the organization. In short, everybody wins.
However, to get the most out of mentorship programs – and convince top executives of their necessity – HR teams and managers need to be able to measure their return on investment (ROI).
This article explores the difficulty of measuring ROI in a mentorship program and provides strategies to do it effectively. Learn how to track the effects of mentor-mentee relationships and pinpoint areas for improvement to optimize your mentoring programs and maximize their success.
What is the return on investment of a mentorship program?
There are a lot of reasons to start a mentorship program: increased employee satisfaction, improved performance, higher retention, more empathetic and connected cultures, and more.
Not convinced? Let’s look at one study where researchers observed the impact of mentorship on a group of nurses in Malawi. After a one-week group mentorship program in which five highly trained nurses shared their knowledge with a group of colleagues, competency scores went from 32% to 97% – more than double the original rate.
The seasoned nurses worked alongside their colleagues, sharing their tacit knowledge and advice. By osmosis, the other nurses learned. And that translated into higher competency scores.
Let’s turn to your program. To determine the ROI of your mentorship program, you'll need to measure employee progress in critical areas relating to your program's specific goals and strengths.
There are a few areas where you can demonstrate ROI. Depending on where you want to show impact, you can show mentorship’s ROI in the following areas:
- Salary increases
- Promotions
- Increased productivity
- Improved retention rates
- Meeting or surpassing KPIs
Michelle Ferguson, a global transformational executive, and author of Women Mentoring Women: Strategies and Stories to Lift As We Rise, shares that measuring employee engagement improvements from mentorship takes time, but it’s worth it.
“It takes a little bit of time and enough data to have it statistically valid, but we were able to see that employees who were in the mentoring program or ERG had higher levels of engagement, which we could translate into lower turnover. “
Demonstrating the impact of mentorship on these areas allows you to see whether or not the program is having a positive impact on employee development. The outcome you’re looking for is showing the benefit of mentorship. And the benefits of running a mentorship program are numerous:
- Increased job satisfaction among participants
- Improved performance in critical roles
- Higher levels of engagement among employees
- Increased trust between mentors and mentees
- Better understanding of company goals and culture
- More effective communication between employees
- Higher retention rates
- Greater productivity and efficiency in the workplace
- Enhanced leadership skills
- Improved mental health and well-being
By measuring and drawing a clear line between your mentoring program and the above benefits, you’ll ensure continued support from leaders. Likely, you’ll even get the support to scale your mentorship program.
Why is it important to prove the ROI of mentorship?
As an HR or learning and development (L&D) team leader, you know that mentorship programs are incredibly beneficial. However, you need to convince your leaders and top executives; for that, you need to prove their ROI.
This requires demonstrating the impact of your program on the bottom line.
Mary Schlegel, co-founder of MentorStrat, a mentorship consultancy, shares why getting buy-in requires more than just collecting feedback that it was helpful for employees:
“If I'm not looking at the bigger picture, then it’s like, ‘yeah, people did find the program helpful—they said they learned these skills’— but if I can't show to leaders [how it impacted] the bottom line, they're not going to continue investing in, or continuing to improve the program.”
Here are some further reasons why measuring ROI is critical for the success of your mentorship program:
- You need to understand the impact of your program – measuring ROI allows you to track and assess the effectiveness of your mentorship program. This helps you identify potential improvement areas and ensures that it delivers maximum value for all stakeholders.
- It makes a compelling business case – having hard data on the ROI of your mentorship program can help you make a convincing argument for why it should remain part of the organization’s long-term strategy. This could include anything from improved employee retention rates to greater employee diversity.
- It helps secure funding – without concrete evidence of the ROI of your mentorship program, it can be difficult to secure any additional budget to continue growing it. However, you can make a compelling case for why it deserves further investment by providing data-driven insights into its impact on employee performance.
Ultimately, measuring the ROI of your mentorship program is essential if you want to keep it running and ensure that promising employees have the opportunity to develop their skills and progress within the organization. With precise data on how it contributes to organizational success, executives are more likely to understand its value and provide ongoing financial support.
Is it easy to calculate the return on investment of your mentorship program?
While choosing which metrics to measure to determine the ROI of your mentorship program may seem daunting, a few carefully selected key performance indicators (KPIs) will tell the tale and prove the case for a mentoring program in your workplace.
These KPIs include:
- Retention rates – mentoring has been proven to increase employee retention. A successful mentoring program helps employees build loyalty and commitment, leading to lower turnover costs for the organization.
- Engagement rates – an effective mentorship program can significantly improve engagement levels in the workplace. This encompasses not only engagement with the work but also with work relationships and more engaged with the company itself.
- Promotion rates – employees who participate in a good mentorship program are often better prepared for promotions due to the increased knowledge and confidence from having someone coach them along their career path. This can lead to greater promotion rates within the organization.
- Equity, inclusion and belonging – mentoring can positively impact equity, inclusion and belonging in the workplace. A well-structured program with specific goals for each mentor/mentee relationship can help create an environment of respect and understanding between employees from different backgrounds.
Measuring ROI is critical to determining whether your mentorship program is worthwhile. With the right KPIs in place, including those listed above, you can get a clear picture of your program's performance and if it’s worth continuing.
The challenges of measuring a mentorship program
Although it’s incredibly powerful to show the impact of your mentorship program, it’s not always easy to draw a clear connection. That’s because mentorship’s impact isn’t quarterly. It plays out over months and years.
Measuring ROI in a mentorship program presents several unique challenges:
- Mentoring program managers may not have as clear access to important data, so they’ll need to partner with other departments that own employee data to measure and analyze their program's performance.
- Quantifying the soft skills developed through mentorship programs, such as improved communication or problem-solving abilities, can be challenging.
- Measuring ROI requires collecting data from many different sources, which can be time-consuming and laborious.
- Mentorship programs require a long-term commitment, so any immediate benefits may not be seen for several months or even a year.
Despite these challenges, there are some steps HR teams and managers can take to ensure that the success of their mentorship program is measurable.
Here are some tips:
- Partner with data people early on to help ensure that the right metrics are tracked and analyzed.
- Focus on tracking tangible and intangible results, such as improved job performance or employee satisfaction.
- Utilize surveys to collect feedback from mentors and mentees throughout the program. This will allow you to measure progress over time, identify successes and opportunities for improvement, and better understand its effectiveness.
- Make sure you set clear goals at the outset so that you can track progress towards those objectives later on down the road.
By overcoming the challenges associated with proving your program’s impact, you’ll ensure the program’s longevity.
Bottom line
With the right approach and tools, you’ll make the case for a mentoring program that leaves a legacy in your workplace.
At Together, we’ve developed several in-depth resources to help you calculate the ROI of your mentorship program. Make sure to download our Ebook, Measuring Return on Investment of Mentoring, which will unpack how to show the productivity changes among employees who receive mentorship.
Likewise, take advantage of our mentorship platform that makes it easy to build an scale enterprise mentoring programs. If your program has 50 or more participants, our pairing algorithm and program management tools will save you weeks of planning and give you the insight you need to build a world-class mentorship program.
Schedule some time with our team to learn how you can get started.
