Needless to say, team building events are far from free. Not only do they require extra funds for food, prizes or other tools and supplies, but they also require you to pay your employees for time that could be considered non-productive. Additionally, the amount of time and effort you put into these events is time and effort that you take away from other tasks at hand. The question, therefore, is just how do you know that these events are actually worth the time, effort and expense put into them?
Measuring Team Building Success through Return On Investment (ROI)
Fortunately, there are ways that you can track the results of these events and virtually calculate a clear Return On Investment (ROI). The fact that the most successful companies engage in team building exercises demonstrates beyond doubt that the ROI more than justifies the expense of such events.
The first thing to do in determining the ROI on team building events is to create a measurable goal for each event. Simply having the employees of your company spend the day playing sports together will be fun, but that alone won’t necessarily produce many measurable results. What you need to do is decide on a particular situation that you want to improve and design your event around that. For example, if accidents in the workplace are more common than you would prefer, incorporate the theme of safety into your event. Include activities that teach the importance of safety rules and procedures, and have discussions on the topic. After the event, you will be able to track the number of accidents in the workplace and see if the event had the desired result. In addition to being able to see the number of accidents decrease, you will be able to see the reduction in related expenses. This is an easy way to measure the ROI of that particular event.
Evaluating Team Building Success through Turnover Rate
Another measurable variable that can be affected by team building events is employee turnover. If your company is having an issue with keeping employees for more than a year or two you may want to create team building events that improve employee morale and focus on the causes of turnover. During the next year, you will be able to see whether or not the number of employees who quit shrinks or not. If you have fewer employee losses, then you will know that your event worked. Sometimes it may not be easy to get a clear number on money saved in this area, but there are always ways of figuring out the average cost of replacing an employee. Thus, you can multiply that average cost by the reduction in turnover and estimate your ROI for the team building event.
Comparing Mistakes Done Before and After Team Building
Finally, there is the issue of mistakes made in business. Manufacturing and printing companies lose untold amounts of money each year due to mistakes that could have easily been avoided if better communication and training had been in place. Creating team building events to address these areas of concern can go a long way to preventing costly mistakes in the years to come. Seeing a downward trend in lost revenue will be an easy way of determining the ROI for your team building events.