Industry Insights

Workforce ROI

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Workforce ROI is defined as the return on investment of a workforce. It is calculated as follows: (net profit resulting from the work of the workforce / (cost of hiring + cost of training and onboarding + payroll)) *100.


Why is it important to calculate Workforce roi?

Workforce ROI is important to all companies because labor is often the number one cost center. Since the retail industry is facing increasing pressure to keep costs low, it is beneficial to maximize the ROI of your workforce.


How to Maintain High Workforce ROI in the Gig Economy

Due to the rise of the gig economy in retail, the rules around maximizing workforce ROI are changing.

In a traditional workforce, the average value produced by each worker is relatively stable as long as the turnover is not too high. With a low turnover, the value created by your workforce almost always offsets the cost of hiring and onboarding.

In the gig economy, the net profit resulting from your workforce depends on the volume of tasks your workforces perform. Sometimes, on-demand workers will only take one gig, if any, after being hired. In that case, the ROI will be low to negative.


How to Optimize the Roi of Your Workforce

There are two ways to optimize the ROI of a workforce:

  • Increasing productivity and number of gigs/workers
  • Decreasing hiring and onboarding costs

The key to increasing workforce ROI is gaining more visibility into the health of one's workforce. In retail, this means investing in collaborative retail execution platforms like this to empower your teams and optimize performance. 


free roi calculator tool

Since we're on the subject of ROI, we'd be amiss not to mention our very own ROI calculator tool. While this tool doesn't calculate workforce ROI, it will show you how much you could save by implementing our retail execution platform.


Calculate Your Potential ROI with Movista Here


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