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ROI Calculator on Apprenticeships & WBL for SMEs

27/2/2019

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ROI Calculator on Apprenticeships & WBL for SMEs
​The Model for calculating the return on investment (ROI) of worked-based learning and apprenticeship reflects the perspective of the consortium project - “Return on Investment of Work Based Learning and Apprenticeships”, coordinated by Slovakia, with partners from Portugal, Greece, Bulgaria, Cyprus, Italy, United Kingdom and Spain. For more information about the partners in the project, read here.
 
The “RoI of WBL and apprenticeships” is based on the traditional model of calculating ROI, taking into consideration the costs and benefits of the SMEs regarding their investments in WBL and the apprenticeship courses.  
 
The list/menu of key “costs” and “benefits” proposed by the model are based on national research reports, developed for partners' countries (such as Slovakia, Portugal, Greece, Bulgaria, Italy and Spain), highlighted the SMEs' needs and their national apprenticeship system. 
​

What is ROI?

ROI is the calculation that compares the value of outcomes (changes as a result of an activity) to the value of the resources needed to create them.
 
Presented as a ratio, the value of outcomes is divided by the value of resources required to create them. The results of the calculation demonstrate the efficiency of an investment or activity. This can support the decision-making process by highlighting if an investment provides a positive return, and if there is more than one option, it can help decide which option provides the greatest return. 
​
The return on investment formula is:
ROI = Value of outcomes / Value of investment

​In the above formula, "Value of outcomes” refers to the aggregated value of all of the included outcomes of investing in WBL.
 
As well as presenting results as ROI, the net present value of money can also be used to support the decision-making process. This is calculated by subtracting the value of the investment from the value of the outcomes.
The net present value formula is:
Net present value = Value of outcomes – Value of investment


​Why is ROI important to SMEs?

ROI is an important determining factor as to whether or not an SME or any business is successful. It is essential for any business to understand the costs and benefits of any investment. Having a positive return on investment means that the business is making money; a negative return on investment means that SMEs are losing money. Ensuring profitability is obviously a relevant factor to maintain a sustainable business.
​
Based on this need, the “ROI of WBL and apprenticeships” project developed a model that underpins the ROI calculation. This has been designed to allow European SMEs to better appreciate the value of an investment in WBL and apprenticeships. 
The digital tool (calculator) is a free-to-access online facility that can help SMEs to calculate the ROI of engaging with apprenticeships/WBL. 
​
Go to calculator

For additional information on ROI and the Calculator, please review the project's resources here.
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