Measuring the Economic Impact and Return on Investment of Skills Development
To secure a licence to operate, companies in South Africa must comply with the requirements of Broad-based Black Economic Empowerment (BBEEE) Act. In addition to individual company requirements and commitments, specific industry sectors must also commit to contribute to the transformation of their sectors by ensuring inclusivity and equality.
Our client wanted to build a future pipeline of skilled employees and transform their supply chain to be more inclusive. They started a training academy to develop the skills of previously disadvantaged individuals and communities.
The objective was not only to create and develop the skills which will be required for the 4th Industrial Revolution, but to also build a vibrant creative industry on the continent.
In addition, our client expected that the skills they had developed would lead to the creation of new businesses, and that local content would be created for their commercial broadcasting channels. This new content would also create new income streams that could be generated from content sales.
We were directly involved in and responsible for the design of the flagship initiative and developed the investment impact strategy. We also created the baseline with clearly identified indicators to measure the future impact.
To support the impact management & measurement processes, we developed performance management frameworks—a Theory of Change and logic model framework.
After three years, the investment was assessed to determine the impact and return on investment achieved.
What we did
- We measured the impact of the training academy and its various skills development programs.
- We also considered and included the impact of the physical infrastructure as well as additional resources that were provided such as: human resources, skills, time, network facilitation and small business loans.
- Through extensive research, engagement and review of the performance data—which included reviewing the monitoring and evaluation reports—we were able to digitize the impact data.
- Because the investment strategy clearly identified the impact objectives & targets, and was consistently measured over a three-year period, the data was credible and material.
- We analysed the impact data and developed an impact report.
The impact and return on investment
Our impact assessment included evidence of:
- Quantitative impact which was measured around the reach of the program focused specifically on demographic data. This demographic data included the number of participants, the age, race and gender of participants, as well as their geographic location.
- Quantitative data which was measured around the depth/scale of the program focused on several impact dimensions including:
- Economic impact: the value of the investment over a period of three years, the value of the additional investment leveraged or generated over a three year period (i.e. how much additional capital was provided/invested by new funders and investors), the value of the training and skills development training provided, as well as the income generated by the students over the three year period.
- Social impact: the impact of the program was measured on individuals in terms of increased access to employment opportunities, increased qualifications obtained, and actual employment statistics. Consideration was given to drop-out rates during the process as well as the final throughput rates on completion of the various programs.
- Impact was also measured on the sector which included impact data on: increased access to number of skilled human resources, increased capacity created in the local sector, and increased income generated by the sector from the sale of local content.
- Additional direct impact dimensions identified included the increase of new entrants (inclusion of previously excluded individuals and population groups to the sector), the value of diversity and inclusivity from a female perspective (empowerment value), and the longevity of the impact.
- Furthermore, because of the success of the project, additional funding was secured from government. This is a direct economic impact based on the fact that new technical and academic qualifications were created for the sector, new infrastructure and vocational training capacity was created, and the number of employed people in the sector indirectly contributed to reduction in unemployment statistics.
- From a return on investment perspective, the investor’s licence to operate was secured and this model was used to secure additional broadcasting rights in other African countries. The increased footprint, additional revenue generated through increased subscriptions, and advertising revenue contributed to the future sustainability of the company. This also contributed to cost savings, cost effectiveness and increased brand and reputation awareness. Furthermore, by building its own future pipeline of talent, the company incurred future cost savings and secured new content for its channels. The sale of this content contributed to profitability and also raised the company’s profile globally. The company has been invited to share their impact journey with other broadcasters all over the world, and the company’s impact report is now considered a benchmark in the industry sector.