What is Return on Investment
It can be helpful to think of training programs, and the time spent earning What is Return on Investment
It can be helpful to think of training programs, and the time spent earning certifications, as investments–when considering attending one program versus another, ask yourself: which is a better investment?
Return on Investment (ROI) is a financial metric used to evaluate the profitability and efficiency of an investment. It measures the gain or loss generated on an investment relative to its cost.
In the context of attending healthcare training programs and earning certifications, ROI is a good measure for comparing one program to another.
How to Determine ROI
To determine the ROI of attending a CNA training program, you need two values: the initial investment and the final value of that investment.
The basic formula for calculating ROI is:
ROI = [(Final value of investment - Initial investment) / Initial investment] x 100
For the purpose of finding ROI for a CNA program, you can visualize the formula like this:
ROI = [(First Year Expected Salary - Total Costs of Program) / Total Costs of Program] x 100
Begin by calculating the total cost of obtaining the CNA certification.
“Total cost” can include tuition, testing fees, textbooks, clinical supplies, and any other associated expenses. Many healthcare training programs include necessary supplies and materials in their total tuition costs, but always check with administrators to be sure.
Next, research potential salaries for certified nurse aides–this is the “final value” of your initial “investment” of paying the tuition for a training program.
With these two values, you can easily calculate the ROI for attending different programs!
Why ROI is Important to Consider
If you’re considering pursuing training or degree programs in order to advance your career, it's important to conduct thorough research prior to enrolling.
ROI is a helpful metric for weighing the financial benefits of one program over another. When considering attending healthcare training programs or earning certifications, the initial cost, including tuition fees, study materials, and examination expenses, should be weighed against the expected financial gains and career prospects.
In the healthcare field in particular, certifications or degrees are often required for advancement and increased employability. As a result, individuals can see a substantial return on their investment over time in the form of increased earnings and career advancement.
In addition to financial returns, you should also consider the non-monetary costs and benefits of healthcare certification programs. These may include time spent earning certifications, personal growth, intensity or stress of training, and later, job satisfaction.
Ultimately, calculating the ROI of healthcare certifications goes beyond immediate financial gains; it encompasses both short-term and long-term benefits, ensuring that individuals can make informed choices about their career development and improve their job prospects.
An Example ROI for CNA Programs
Let’s practice by calculating the ROI for attending an imaginary CNA training program.
The average tuition and total cost of attending a nurse aide training program may differ from state to state or even city to city, but in this example, we’ll say that the total cost of our fictional certification program is $1,100.
For our purposes, this tuition includes all supplies and materials needed to complete the course and pass relevant certification exams.
Then, using the U.S. Bureau of Labor’s Occupational Outlook Handbook (OOH) as a reference guide, the median annual salary for nursing assistants and orderlies in the United States is approximately $35,740 per year.
Note: the OOH provides the median, or the middle value of the data set of all nursing assistant salaries across the country, not the average salary, so there’s an equally probable chance that another salary may be higher or lower than this estimate. Spend time researching salaries to see what you can expect to earn at different facilities in your region.
Finally, to find the ROI, set up your formula like this:
ROI = [(35,740 - 1,100) / 1,100] x 100
= [34,640 / 1,100] x 100
= 31.4909 x 100
= 3,149.09 %
So in this situation, by attending a training program with a tuition of $1,100 and then beginning a job as a CNA, you would receive a 3,149.09% return on your investment after just one year of work.
Put differently, you will earn back 3,149.09% of your original investment—wow!
Comparing ROIs
Attending a training program and going on to work as a CNA yields an incredibly high return on one’s initial investment in a very short amount of time. What about attending a four-year university?
In the United States, the average cost of attending and living on campus at an in-state, public university is about $26,000 per year, or $104,000 over the span of four years.
According to the U.S. Bureau of Labor Statistics, the average bachelor’s degree-holder earns an average salary of $60,000 per year.
Plugging these statistics into the basic ROI formula, the ROI for the average bachelor’s degree is -42.31%.
Degree holders, unlike certified healthcare workers, who begin seeing positive returns on their investments within their first year of working, may not see returns until they have been working in full-time positions for several years.
So although the starting salaries for jobs that require bachelor’s degrees may be higher, it generally takes degree holders longer to “earn back” their initial investment compared to those that attend short-term certification programs.
When it comes to comparing potential career paths, and the education options associated with them, there is no one-size-fits-all solution. Additionally, attending a certification program does not prevent students from pursuing other degrees in the future—there are many paths that can lead you to your dream job!
When considered alongside other factors, using ROI can be a helpful tool for determining which training program is right for you.
