Return on Investment in Vocational Rehabilitation
Return on investment (ROI) is a phrase that has become popular in the vocational rehabilitation (VR) profession in recent years. For many VR directors, it is tool for leveraging financial resources. In its most basic form, ROI is the return to tax payers for investing in the vocational rehabilitation program. Across the various VR programs in the country, there are many variations on how to calculate ROI and what to factor in. A common element to all ROI formulas is highlighting a bottom line that describes what a one-dollar contribution of appropriated funds equates to in dollars returned.
Regardless of the approach to measuring ROI, some of the variables that are factored in include the number of VR participants served, their income at application, the number entering the workforce, their increase in earnings once they go to work, tax contributions and the multiplying effect that will accompany spending additional earnings on goods and services. In some instances, VR staff earnings and the like are factored into the calculations. The result is generally very positive for VR agencies. Most agencies can tout that for every dollar that is appropriated to them; five or more dollars are returned to the treasury when a participant with disability enters the workforce. This comes in the form of increased tax contributions, individuals dropping off the Social Security disability rolls and individuals expending more on goods and services.
While this is a very simplified explanation and certainly doesn’t account for everything that is calculated into ROI, it serves to point to the fact that VR is good business. Many legislators are encouraged to maximize an appropriation when there is a strong sense that it will contribute to the economy. In fact, it appeals to both sides of the legislative aisle. For conservatives, reducing the number of people on the Social Security disability rolls and having more people contribute to the tax base is a winning proposition. For the liberal side, increasing opportunities for persons with disabilities to make meaningful contributions by entering the workforce and integrating into the mainstream of society is good social policy. Of course, the largest impact is for the person with the disability who is provided with an opportunity to become productive and independent. As a society, we value work and the status that comes with it.
It will be an interesting proposition to evaluate ROI under the Workforce Opportunity and Innovation Act (WIOA). As agencies combine their resources and report on common measures, will this have some type of an impact on ROI studies? Will states opt to conduct an ROI study on all workforce programs? As long as individual programs like VR receive a separate appropriation, it will be to their benefit to conduct their own ROI study. Additionally, this is another method of evaluating the impact of VR services on the disability community.
Any way that you look at it, ROI will remain a valuable tool for VR agencies and appropriating entities. The impact of returning individuals with disabilities to work or assisting persons with their first employment opportunity can only result in a positive economic gain. A winning proposition for VR programs, lawmakers and VR participants.
About the Author
Ralph has over 30 years of experience in managing vocational rehabilitation programs. He also served the national VR program, via the Council of State Administrators of Vocational Rehabilitation as co-chairman of the Employment Committee and the Region 6 Representative.
Ralph had a hugely impactful career with the Division of Vocational Rehabilitation in New Mexico. He was a member of the original Aware Implementation team and has extensive experience as a field service manager. Ralph also served as the Director of New Mexico’s agency.
Currently, Ralph works at Alliance as a Strategic Account Manager and serves as an essential part in serving their VR customers.