How to Measure the ROI of Leadership Development

Investing in leadership development training can transform your business, but calculating its return on investment (ROI) is the key to proving its true value and impact.

“We spend a lot on it,” said Patti P. Phillips, co-founder and CEO of the Chelsea, Ala.-based ROI Institute. The global leadership development program market is nearly 90 billion as of 2025, per a report from research firm Future Market Insights, and it’s predicted to grow to more than $564 billion by 2035. “People want to know: What’s the real value?”  

Having the data at hand when the chief financial officer asks you to prove the program’s worth may help you avoid cuts or bolster your request for an increase in funding. Even more importantly, conducting an analysis enables you to identify where improvement is needed, so the initiative can be more effective next time, Phillips said.

Toolkit: Developing Organizational Leaders

Doing the Math

Although the specific numbers will vary from company to company, the calculations for the average ROI shows promise: Every $1 spent on leadership development programs results in an average of $7 back to the company, according to a report from New Level Work, a coaching and training platform for managers. The gains come from three major factors, which the report called “tangible benefits”:

1. The revenue from sales that can be directly attributed to leadership development.
2. The savings from employee retention because of leadership development.
3. The savings from promoting workers from within. 

To calculate the final number for your organization, use a simple math equation: (Total tangible benefits – total program cost) / total program cost x 100 = ROI.

Whatever your findings, share them with business leaders — even if the program is currently in the red. A negative ROI could indicate you spent too much money on the program, for example, or that the right participants weren’t selected. Use your evaluation to right the ship.  

“A negative ROI doesn’t mean you have to stop the program,” Phillips said. “It does mean you need to improve it in some way.”

Qualification: People Manager Qualification

Determining the Tangible and Intangible Benefits

It’s vital to build data collection and evaluation metrics into the process early when developing the leadership program, rather than treating it as an afterthought, Phillips said. If possible, use data from the performance management system or conduct 360-degree assessments, gathering feedback from multiple sources. If cost is a factor, use an anonymous survey to ask participants directly.  

Key feedback questions might include:

• Do participants believe the program was relevant? Conduct surveys after training programs to collect participant feedback, such as the extent to which participants have bought into the content or the likelihood that they will apply what they’ve learned, Phillips said.
  
  
• How much did they learn? Assessments can be given to test the knowledge and insights acquired. Simulations and role-playing can also provide evidence of learning.
  
  
• Are they applying what they learned to their jobs? Wait at least nine months after the training, then return to the participants to see if the training had an impact, said Darleen DeRosa, a consultant in leadership advisory services at Spencer Stuart in Stamford, Conn. Be aware, however, that just because leaders aren’t using a particular skill in their current role doesn’t mean they don’t know how to leverage that ability in future positions within the organization.
  
  
• What impact did the program have on the business? Look for improvement in measures related to productivity, efficiency, job satisfaction, customer satisfaction, and innovation, Phillips said.
  
  DeRosa also suggested looking at retention figures and whether participants were promoted. Keep in mind, though, that it can take a few years to see how many participating employees started rising in the ranks.
  
  
• What are the intangible benefits? If improvements can be shown in teamwork, inclusion, and experience — which are directly linked to leadership development — the value of the program becomes even more clear. 

Calculating the ROI of leadership development training not only justifies its value but also highlights areas for improvement to maximize its impact. By leveraging both tangible and intangible benefits, businesses can refine their programs to drive long-term success and growth.

— Former SHRM editor Dori Meinert contributed to this report.