I have been tasked to compute ROI for/on the addition of a person to a team. My boss has given us numbers to use to compute this. However, I think we are doing it wrong. I try my best to explain. He is looking for how many years will it take to pay for the cost of this person. Here is the example
A store will loose 100k in inventory at retail, or 50K at cost in a year. The cost of a person to help reduce that loss is 30k. I see this as two questions
What percent reduction of the loss would the person have to reduce to pay their wage for a year? Or just pick a percent (say 10%) and then figure out how many years it would take to recoup?
Am i on the right track? also ROI is (income/cost)*100 what is the meaning of the value? is it dollars, time ?
Many thanks to any and all that may help?