Return on Investment in Mentoring Programs – Myth or Reality?

By Catherine Mossop, FCMC, of Sage SageMentors Inc., Canada

Page Index:

IntroductionCatherine Mossop's Workshop

I had the privilege of presenting a workshop of the same title at the International Mentoring Conference in Las Vegas in April 2008. World traveling mentor professionals built their measurement plans and worked through sample survey questions. Great sharing, good time and good learning was had by all!

This article shares the highlights from that conference session and provides an introduction to the complex topic of outcome measurement for mentoring programs.

Around the world, organizations and funding stakeholders are looking for accountability in their mentoring programs. By generating outcome data that is relevant to the stakeholder requirements, programs are growing, attracting the resources needed for success and are sustainable. Presented here are
the foundation steps for creating measurable outcomes, the core process for documenting Return On Investment (ROI).

First step: Background

Begin with the end in mind.

At the design stage, set the program within a strategic context to identify what is to be achieved. This background assessment can take into account current and future pressure points. For example:

Company X Business Strategy:

“Company X will be the supplier of choice for engineering design technology products and services within the global Aerospace industry. The human factors that will impact our ability to deliver on our strategy are:

  • Highly mobile work population including the drain of talent from the region, area, or country
  • Looming/current aging population crisis and the loss of our top engineers
  • Physical environmental factors impacting business and employment
  • Unstable political environments where some of our clients are located
  • Immigration, multi-cultural and diversity impact – the accreditation and integration of foreign trained professionals
  • Globalization and employment mobility – is our top talent mobile when we need them to be?

Second step:  Review business issues/tactical planning and link to human capital strategy (HR Planning/Talent Management)

Knowing the human resource plan, provides the link from the mentoring program to the business strategy. Continuing our example from step 1:

Company X Human Capital Strategy:

To be the employer of choice in the design engineering field we will attract, grow, and retain the best of the best aerospace design engineers in the world. The ongoing development of our top talent is critical to successful delivery of premier quality engineering design technology products and services.

Mentoring assures the transfer of technical knowledge and provides a means of developing leadership talent in the organization so it will be one of the key strategies we will use to implement our Human Capital Strategy.”

Our IMA workshop participants identified other business and tactical planning issues that impact operational costs and where actual dollar values can be identified. For example:

  • Talented people are not putting themselves forward for positions thus necessitating the expense of external hiring. The productivity cost of an external hire and integration into the workplace culture can be calculated at 3X salary; the cost of loss of one and replacement of one top talent is 6X salary
  • The leadership succession pool doesn’t have enough internal talent for replacement of key positions. Recruiting fees alone are a minimum of $35,000.00 to hire one executive.
  • Aging workforce issues where costs can be identified in lost productivity and productivity gains such as:
    • insufficient number of people to replace retirees
    • processes to retain, motivate and engage older employee
    • keeping career specialists motivated
    • how to transfer the knowledge from one generation to the other

Where internal data is not easily accessible, it can be useful to find external data to use as a base-line or benchmark to support the business case. Recent external data show the following:

  • Deloitte & Touche deployed a large scale career management program for its 30,000 partners and employees in the USA and a coaching program for 1,000 employees and avoided an estimated $11 million USD in turnover-related costs1
  • one school board went from 25% loss of 1st year teachers to 90% retention after mentoring was introduced
  • one pharmaceutical company indicates a 1% + change in EE satisfaction = 3% + movement on net income
  • law firms report it costs $315,000. to lose a 2nd year associate2
  • companies with highest % women on senior management teams have 35% higher return on equity
  • ROI on mentoring program for high-potential employees in a manufacturing company after 12 mo. = 1,200%

Step 3: On-the-job performance:

Managers are aware of what it takes to bring an employee to optimal performance and see mentoring as a support mechanism. Workshop participants also identified the following pressure points:

  • Speed of integration of new people into key positions is taking too long and the demands are overwhelming resulting in frustration of the employment relationship
  • Knowledge transfer. There is an increasing need to support the application of new learning in the workplace
  • Student failure levels are higher than desired – students with potential are not transitioning effectively from junior to higher levels of education; from one system to another; and from school to work
  • Pressures for new teacher integration and retention; the need to reduce attrition levels of new teachers; increase participation and engagement of experienced teachers
  • Retention of apprentices in craft/skilled trades is reaching a crisis with only 50% completing the program and there is a pre-existing long-term shortage of talent

Mentored employees develop learning goals such that they are increasingly effective on the job, and preparing for the next opportunity. In the mentor/protégé learning relationship, robust measurable learning objectives are developed.

Step 4: Define and identify performance outcomes:

Stakeholders will identify what performance outcomes are important to them. These may include:

Improvements in:

  • profit
  • revenue
  • customer retention and expansion of products or services provided
  • customer service satisfaction
  • product quality
  • employee engagement
  • compliance
  • retention of students

Reductions in:

  • expenses/costs
  • complaint escalations
  • lost time
  • absenteeism
  • Improved

Where stakeholders participate in identifying the progress indicators, the program outcomes and timeline for measurement can be established. Having a set of indicators that can be used to demonstrate progress during the investment years will serve to address the needs of funders and sets the design guidelines for program coordinators.

Step 5: Evaluation

Evaluation processes can be delivered by paper surveys, interviews, focus groups and on-line. The following provides samples of survey questions and concludes with the Phillips Method of calculating Return on Investment.

Sample questions for student mentoring:

  • How do you believe that mentoring has improved your school performance?
  • How has your mentoring relationship helped you make better/healthier life and education choices?
  • What has been the most meaningful/useful part of the mentoring experience?
  • Do you feel a part of the University/a valued member?
    • Has this been affected by the mentoring relationship?
  • Has mentoring helped you with your academic commitment?
    • Has it added value to your academic experiences?
  • Is there one aspect of the mentoring program that helped facilitate your transition into college?
  • (mentee/protégé/mentor) did you achieve your personal goal?

Sample survey questions – Mentoring for Leadership Development:

Table 1

As a result of mentoring: Strongly disagree Neutral Strongly 


a I have a better understanding of my impact on others
b I am more effective in performing my job
D I have improved in my relationship management capabilities – manage
interpersonal conflict effectively; member of a team
F I have developed in core competencies for our organization

Sample survey questions (Education related):

As a result of mentoring: Strongly disagree Neutral Strongly 


a As a result of mentoring, I have reduced the amount of time spent
with novice teachers in remediation
b I am more effective in performing my job
C Others have recognized that I am more effective in my job
D I have improved in my relationship management capabilities – manage
interpersonal conflict effectively; member of a team

Please rate the impact of Mentoring on Organizational results:

No impact Neutral High impact
a Cost reduction
b Improved job satisfaction
C Improved student/teacher/work/client relations
E Improved relations with stakeholders
F Improved team work
G Increased organizational commitment

Phillips Method to determine Return on Investment7

The Phillips Method is a comprehensive and credible method of determining return on investment for development. It comprises several steps and calculations to convert performance to financial values and does require measurable learning objectives to be identified at the onset of the program.

The Formula:

(Raw Value (A) X Confidence Factor (B)) X Direct influence factor (C) = Attributed Benefits

(The Sum of all Attributed Benefits (D) / all attributed costs (E)) X 100% = ROI

A – Raw Value: the attributed annual value of savings or gains before reductions to achieve a realistic value.
B – Confidence Factor: assign a confidence value that addresses the question: How confident am I that the raw value number is accurate and record in a _ %
C – Direct Influence Factor: the degree to which the program directly influenced the savings or gains in _ % (other factors that are taken into consideration might include an overall company mandate to change, a change in the business or other processes that may have influenced the outcome)
D – Attributed Benefits: The sum total of all adjusted and Attributed Benefit values for all participants in the program
E – Attributed Costs: The total of all Attributed Costs for the program – including design, facilitation, hourly rate of participants off the regular work, facilities etc.

(AXB) XC = Attributed Benefits (D)

? D = Net Program Benefits

Net Program Benefits X 100 = ROI

Attributed Costs


Demonstrating the value and Return on Investment for mentoring and development programs assures ongoing investment to sustain the programs. The companies that develop their people build value for their organizations. This value is seen in innovation, improved decision making, producing better products
and services, as well as recruiting higher caliber of talent, retention, and overall business performance. Within the not-for-profit sectors, funding agencies appreciate and are increasingly asking that service providers provide a strong business case for their investments. By demonstrating measurable outcomes, the business case is strengthened and demonstrates how the program truly makes a difference in the lives of people and communities.

Measure what you can, then you can to demonstrate the value of YOUR mentoring and development.


  1. W. Stanton Smith, National Director Employer of Choice-Next Generation Initiatives, Assoc. of Career Professionals International, Venice 2004
  2. Toronto Star, Aug.16, 2007
  3. Fortin, J. 2003,Evaluating a Mentoring Program, Québéc, Les éditions de la fondation de l’entrepreneurship
  4. Kirkpatrick, D.L. 1998, Evaluating training programs: The four levels, San Francisco, Berrett-Koehler
  5. Kirkpatrick, D.L. & Kirkpatrick, D.J. 2005, Transferring learning to behavior: Using the four levels to improve performance. San Francisco, Berrett-Koehler
  6. Peterson, D.B. 2002, Management Development: Coaching and mentoring programs, in K. Kraigner (ed), Creating Implementing, and managing effective training and development: State-of-the-art lessons for practice (pp. 160-191), San Francisco, Jossey-Bass
  7. Phillips, JJ 2003, Return on Investment in training and performance improvement programs 2nd edition, Boston, Butterworth-Heinemann
  8. Stober, D. R & Grant, A San Francisco (Eds.). Evidence based coaching handbook: Putting best practices to work for your clients. Hoboken, NJ. Wiley

Author’s Note: Catherine has published and launched
Cascade to Wisdom: A Field Guide for Mentors and Cascade to Wisdom:
A Field Guide for Protégés,
and supporting train the trainer program is
now available. She is co-author of Mentoring and the World of Work in Canada,
2003 and chapter author of From Polar Winds to Tropical Breezes: Successful
Women in The Americas
, 2006. Comments and questions on mentoring and coaching
can be directed to her at: