(When) do you see a return on the investment you make in your graduates?

I spent a very enjoyable morning at the AGR Development Network meeting yesterday. In particular, AGR’s Research Analyst Samuel Gordon presented some fascinating statistics on graduate retention and Return on Investment (ROI), noting that in some sectors more than half of the employers surveyed by AGR don’t measure ROI for their graduate schemes.

This surprised me, especially given the relatively common practice of measuring retention rates. If you can’t measure the return that your graduates deliver, and more specifically if you can’t be sure whether a graduate leaves before ROI turns positive, how do you know whether your scheme is making a financial contribution to the business?

This got me thinking about a briefing paper on this topic that I helped AGR produce in 2009 (“What is the Return on your Investment? Measuring the value of your graduate and placement schemes” – AGR members can download it from the website). The concepts introduced in the paper still hold true today, including a simple model for estimating the length of time it takes for ROI to turn positive after a graduate’s start date.

And once you’ve started to measure it, there are a number of ways to try to make sure ROI turns positive sooner. You could try to reduce your recruitment costs (less investment) – would any universities like to suggest how employers could recruit graduates more efficiently on their campuses? Or you could try to make sure that your graduates start contributing to the business more quickly (earlier return) – perhaps through the graduate development scheme.

Effective graduate development programmes was one of the discussion topics at the network meeting yesterday and it was great to hear a range of interesting contributions including some from the Student Development Team at City University London, who attended to think about ways to make their students more employable. Another example of how employers and universities can make progress when they work together to understand the other side’s challenges.

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