4 steps to measuring the performance of your graduate scheme and getting a ROI
Good Graduate schemes are important and they are expensive to run. They are important as they are a major source of talent for critical roles and a pipeline for future leaders. They are expensive as they involve creating a specific employee experience which is more than just a role.
They are also risky, as today’s best millennial talent is quicker than ever to move on to the next opportunity if they are not happy.
But our experience is that Graduate schemes are seldom measured
This causes all sorts of problems. Their value is not quantified, decisions are driven by anecdote and senior leader diktat and there is no way of knowing if changes are improving a scheme or making it worse.
In our experience There are four levels of metrics that you need to measure to have a good view on the overall return on the investment in you scheme.
Level 1. Is the scheme achieving the stated business objective?
It is always best to start from the business objectives for the scheme. This is best framed as a specified target role, job type or a target job level within a time period for a target % of the starters. For example "our grads will be level 6 operations managers in departments x and y within 2 years". Or "our grads will be leading cross functional teams in new business areas within 3 years".
If that time period is longer than the duration of the scheme, then there has to be an interim measure of a role specified for the end of the scheme. The Level 1 objectives would typically include targets for retention and turnover.
This level of measurement requires a clear strategy and business case behind the investment in graduates.
Level 2. How well are participants on the scheme performing?
At the heart of this there needs to be either a robust graduate performance review system which is reliably telling you if the graduates are performing to your expected standards.
Depending on the type of scheme this can be supplemented with further measures around
Engagement of the grads with the scheme and business
Speed to perform
Number of miss-hires
Progression through roles
Are the grads’ roles aligning to the talent priorities of the business
Level 3. Is the scheme running as an effective process, in other words does the scheme do what it says it does?
To do this you need to have a predictive model of what you believe drives the effectiveness of the scheme and some benchmarks to know how well you are doing. Or you can use one we have made earlier which looks at 5 factors that experience shows drive the effectiveness of most graduate schemes.
Are the objectives of the scheme clearly understood?
Are you hiring the right grads?
Do the key people in the business buy in to the scheme and their role in it?
Is the learning journey appropriate?
Are the graduates motivated, both intrinsically and extrinsically?
By tracking these factors over time you can clearly see three things: where do you need to focus, are you improving the process or not since last year and how are you doing against other similar firms.
Level 4. How much is it costing the business to have this scheme in place?
This includes the total end to end costs from recruitment through to scheme management costs and salary premiums versus the job done. The cost can then usefully be looked at as a total, a cost per head or a cost per remaining head all of which are useful.
Working out a return on investment
This takes a little extra work but if you have the above information you can calculate a sensible view on ROI and payback. Most grad schemes have high ROI but long paybacks so you need to track both.
Why apprenticeships make this more important than ever
As apprenticeships become more common, the need to understand the relative performance of graduate schemes, apprenticeship schemes and hybrid degree level apprenticeships become doubly important as senior leadership will want to know more about where they are getting the best return. No measurement approach, means this becomes anecdotal and inaccurate.
Measuring the effectiveness and impact of graduate entry schemes makes good business sense and is vital for you to make decisions on what is working and what you need to change.
Good measurement has to be accurate, reliable and timely. Ideally, it allows you to look at time series comparisons and external benchmarks so you can see the changes over time
Once you have good measurement in place you will be able to answer the questions about performance your business team asks accurately, change your scheme with confidence and move away from management by anecdote.