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Article
Return on Investment: A Cost-Effectiveness Measure for the Texas' Workforce System
Ray Marshall Center for the Study of Human Resources (1997)
  • Dave N. Norris, Louisiana Tech University
Abstract
Texas is developing a return-on-investment (ROI) measure to assess the cost-effectiveness of work force programs. Emphasis is on issues related to conducting cross-program ROI analysis at the level of the Local Workforce Development Board (LWDB) in career or one-stop centers. To make the most appropriate and effective use of ROI, the following must be determined: how the measure is to be calculated; which benefits and costs can and will be accounted for; how they are to be measured; from which perspective the measure will be calculated; and what time period will be covered. A study of the use of ROI with Job Training Partnership Act (JTPA) adult and youth training programs identified five benefits: simplicity of interpretation; low cost of measurement; usefulness as a local marketing tool; ability to improve communications with private industry councils; and ability to best allocate resources. Five limitations were also found: lack of control group for determining net impact of training services; lack of a consistent methodology for comparing returns across local providers; non-JTPA services for which ROI models assume credit; nonmonetary benefits that were not accounted for; and limited availability of data. Key issues in conducting cross-program ROI analysis of Texas' work force development programs at the LWDB level are as follows: purpose, perspective, net or gross measurement, within- or cross program, benefit measurement, cost measurement, and timing of measurement. Steps have been recommended for implementing an ROI measure.
Keywords
  • return on investment,
  • Texas,
  • adult education,
  • comparative analysis,
  • cost effectiveness,
  • employment programs,
  • employment services,
  • evaluation criteria
Disciplines
Publication Date
June, 1997
Citation Information
Dave N. Norris. "Return on Investment: A Cost-Effectiveness Measure for the Texas' Workforce System" Ray Marshall Center for the Study of Human Resources (1997)
Available at: http://works.bepress.com/dave-norris/6/