Changed The Reporting. Now Change the Accounting

The current perception of L&D is captured in a report by American Progress bemoaning the way that the training investment is currently reported.

“not on its own but lumped into selling, general, and administrative expenses, or SG&A, a measure that includes items such as company lunches and paper clips.”

Agreed.  They go on to stand up for L&D by showing the problem with this approach.

“Companies’ expenditures on worker training and skills show up not as a valuable investment similar to R&D but as an increase in general overhead, a measure that managers have shown a proclivity for cutting and whose reduction is often cheered by investors.”

They then end it with what I think was meant to be a compliment.

“This treatment of human capital ignores the findings of numerous studies:”

wait for it…

”Investments in human capital enhance productivity and are more valuable to a firm than general overhead expenses. 

L&D is a better use of a dollar than buying paper clips.  Stop all the ROI studies. We have our answer. Maybe we should start doing PSA’s that proclaim, “for the cost of just one executive expense account we can train an entire salesforce for that expansion region.” Or, “if everyone would just print out only the documents they needed we could save enough in paper supplies to onboard 1000 new hires.” L&D has a lot of work to do.  Time to get to it. 

Author: J.

J. Miguez has spent the last 25 years designing Learning & Development organizations and the service offerings that support them. Learning domain explorer.

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