SumTotal Blog

Making the ROI of L&D Count – A CFO’s Perspective

October 25, 2016



The role of the CFO has changed dramatically in recent years. Now they are responsible for not only financial reporting, but also for performance acceleration; for driving analysis and providing the perspective and insights needed to link corporate strategy to execution.

SumTotal Blog ROI of Learning

As a result, CFOs must demonstrate a deep understanding of how their organisations invest their resources to achieve business goals, improve organisational capabilities and drive performance. Given that human capital represents a company’s biggest investment, it comes as no surprise that increasingly CFOs are finding themselves having to not only quantify what’s being spent on training, development and talent management, but also assess how that translates into value for the enterprise.

To further complicate this predicament, too often money spent on training and development is not reported in financial statements. As a result, it does not get the attention it warrants. Despite an average company spend of 36% of revenue on human capital expenses, only 16% say they have anything more than a moderate understanding of the return on human capital investments. This dearth of information is problematic for everyone, but for the CFO it presents a colossal challenge.

The vast majority of CFOs view human capital as a key value driver and a central factor in their company’s ability to achieve outcomes that drive shareholder value,  in the UK alone businesses currently invest over £40 billion a year on formal training, and that’s without taking into account the considerable amount of additional time and resources UK firms commit to addressing the skills challenge that lies ahead. So the big question becomes how best to support workforce development and achieve the best return on your organisation’s investment in L&D?

SumTotal decided to answer this. After extensive research into the area we have produced a white paper, “The Hidden Cost of Talent — A CFO guide to maximising the ROI of Learning & Development,” which examines the most pressing issues around talent management, exposes those areas most prone to financial leakage and calculates the cost of talent management.

Our insights will help you understand how your organisation should invest its resources to improve organisational capabilities and achieve business goals – and the value creation that generates.

Download your copy of the paper now.

 

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