Calculator Inputs
Enter employee costs, time invested, and expected monthly impact. Advanced assumptions help you compare options consistently.
Formula Used
time_value_month = employees × hours_saved_week × weeks_per_month × loaded_hourly × value_multiplier
monthly_benefit_prob = monthly_benefit_raw × (success_prob/100)
total_cost = (employees × hours_invested_each × loaded_hourly) + one_time + (monthly_subscription × horizon_months)
net_value = PV(benefits over horizon) − total_cost
ROI% = (net_value / total_cost) × 100
hourly_net = net_value / (employees × hours_invested_each)
How to Use This Calculator
- Start with employees, hours invested, and base hourly rate.
- Add benefits and overhead to reflect true labor cost.
- Enter hours saved per week after adoption.
- Include measurable monthly savings or revenue when available.
- Set horizon months and success probability for realism.
- Enable discounting if you compare long horizons.
- Calculate, then compare net value per invested hour.
Loaded cost improves pricing of time
A base wage rarely captures true hourly spend. Many organizations add 15–35% benefits and 10–25% overhead for space, tools, and management. If an employee earns $20/hour, 25% benefits and 15% overhead yields a loaded cost near $28.75/hour. Using loaded cost prevents underestimating investment hours and makes initiatives comparable across teams and locations.
Translate time saved into measurable value
Hours saved per week should reflect steady-state behavior, not launch week excitement. A modest 0.5 hours saved weekly across 8 employees equals about 17.3 hours per month (8 × 0.5 × 52/12). Multiply by loaded hourly cost, then apply a value multiplier when freed time shifts into higher-impact work. Use 1.0 for routine work, 1.1–1.3 for revenue-supporting priorities, and 1.4+ only with clear evidence.
Separate recurring gains from one-time spikes
Monthly benefits can combine time value, cost savings, revenue gain, and risk avoidance. Track each stream independently so you can validate it later. For example, $300 monthly savings plus $200 risk avoidance has more stability than a one-off $2,000 sales spike. Subscription fees should be modeled across the same horizon so the benefit and cost clocks run together, including renewals or planned cancellations.
Discount long horizons for fairness
When horizons exceed a few months, discounting keeps distant benefits from looking unrealistically large. Convert an annual discount rate to a monthly rate, then discount each month’s probability-adjusted benefit. A 6% annual rate is roughly 0.49% per month effective. Discounting is most useful when comparing two options with different timing, such as quick workflow cleanup versus a longer automation rollout.
Use decision benchmarks for prioritization
Compare initiatives using net value per invested hour, not only total ROI. Positive hourly net value indicates the program creates more value than it consumes. Payback months are practical: total cost divided by probability-adjusted monthly benefit. If payback is 6–9 months, operational improvements tend to be resilient. Also review breakeven hours saved per week per employee; if breakeven is above 2 hours, revisit scope, adoption support, or tooling. Run a sensitivity pass by lowering saved hours by 20% and success probability by 10 points. If hourly net value stays positive, the plan is robust.
FAQs
1) What does “loaded hourly cost” mean?
It combines wage with benefits and overhead loads to reflect true cost per hour. Use it to price time investments realistically and compare projects consistently.
2) Why include a value multiplier for time saved?
Saved hours may shift into higher-impact work. The multiplier scales time value above cost when the freed capacity supports revenue, quality, or customer outcomes.
3) Should I turn on discounting?
Enable discounting when your horizon is long or when options deliver benefits at different times. It reduces the weight of distant benefits to better match opportunity cost.
4) How is payback calculated here?
Payback months equals total cost divided by probability-adjusted monthly benefit. It is an approximate indicator and does not replace a full cash-flow review.
5) How should I estimate risk avoidance?
Use expected value: probability of an incident times estimated impact. Spread that across months to match the horizon, then validate with historical incidents or control reports.
6) What is “breakeven hours saved per week”?
It is the weekly time saved per employee required for the initiative to break even over the chosen horizon, assuming other monthly benefits stay constant.
Example Data Table
Sample scenarios show how hourly ROI changes with time saved, costs, and risk. Replace these with your own values for accurate planning.
| Scenario | Employees | Hours Invested Each | Hourly Rate | Hours Saved/Week | Monthly Savings | Horizon (Months) | Success % |
|---|---|---|---|---|---|---|---|
| Workflow cleanup | 4 | 8 | 20 | 0.6 | 180 | 12 | 75 |
| Meeting reduction | 10 | 6 | 28 | 0.4 | 0 | 9 | 70 |
| Automation rollout | 6 | 18 | 32 | 1.1 | 250 | 18 | 80 |
| Service playbooks | 12 | 5 | 22 | 0.3 | 120 | 6 | 85 |
| Training refresh | 8 | 12 | 26 | 0.7 | 150 | 12 | 65 |