The role of Learning & Development (L&D) leaders has undergone a significant transformation. No longer confined to traditional tasks like facilitation and curriculum design, L&D professionals must now embrace financial acumen to align their initiatives with business goals. This shift highlights the importance of an L&D financial strategy that focuses on demonstrating ROI and collaborating with key stakeholders such as the Chief Financial Officer (CFO).
In this discussion, Miriam Taylor, a seasoned expert in adult learning, and Jerry Zandstra, a leader in L&D strategy, explore the evolving financial responsibilities of L&D leaders. They share insights on key financial skills, overcoming challenges in measuring training impact, and building strong relationships with CFOs to showcase the value of training programs.
Miriam Taylor: You and I have both been involved in adult learning for many years. The traditional image of the Learning & Development (L&D) leader often meant facilitators, trainers, and curriculum designers. The roles were clearly defined as were the expectations. Learning people build learning experiences. How have these roles evolved in recent years?
Jerry Zandstra: That’s a great question. The landscape has shifted dramatically. L&D professionals are no longer just creating and delivering training programs. We have become strategic business partners. We need to demonstrate the value we bring to the organization, and that means understanding the bottom line. There is a much stronger financial component to our work and our relationship with the Chief Financial Officer (CFO) of our organization might be the most important relationship we have.
MT: Can you elaborate on the financial skills that are essential for L&D leaders today?
JZ: Before we get to the skills we need, letโs begin with the perspective of the CFO. Dr. Keith Keating, the Chief Learning Officer of BDO Canada, has given our industry a gift in his dissertation, Exploring the Beliefs about Training in Organizations: A Perspective from Chief Financial Officers. Exploring the Beliefs about Training in Organizations: A Perspective from Chief Financial Officers – ProQuest. I have read this several times and Keithโs insights are impressive.
MT: Are you suggesting we all need to read more dissertations?
JZ: Probably not a great use of our time, so let me provide Keithโs summary:
First, CFOs acknowledged employees are an organizationsโ most important asset, and CFOs identified that training could produce numerous benefits, including those that support the employee and the organization.
Conversely, the second finding was that CFOs overlook the concrete value that results from training.
As the third finding indicated, for CFOs to better realize the value of training, CFOs need clearer measurement metrics and reporting processes.
To enable improved measurement and reporting, the fourth theme identified that overwhelming opportunity exists to bridge the relationship gap between CFOs and the Training function. This data can be leveraged by the Training function to strengthen the relationship with CFOs, leading to an increased awareness of the beliefs about training, opportunities for greater investment in training for continued employee growth and development, and stronger organizational performance. After all, CFOs and the Training function ultimately work toward the same goal: creating value for the organization.
MT: So, CFOs know L&D is important but donโt necessarily know why or how. They need better metrics which means there is a great opportunity for learning leaders to help them bridge the gap. Is that accurate?
JZ: Absolutely. It goes beyond simply managing budgets. We need to be proficient in financial analysis, understand key performance indicators, and measure the ROI of our programs. This includes quantifying both hard and soft benefits. Hard benefits are easier to measure โ things like increased productivity, reduced turnover, and improved customer satisfaction. But we also need to demonstrate the value of softer outcomes, such as improved morale, increased innovation, and enhanced employee well-being.
MT: How do you communicate the value of L&D programs to stakeholders, especially to those focused on the bottom line like the CFO?
JZ: That’s a key challenge. We need to translate L&D outcomes into business terms that resonate with executives. In some sense, we need to learn what they need and help them get it. We need to be able to tell a compelling story about how our programs are contributing to the organization’s success. For example, we might demonstrate how a specific training program led to a significant increase in sales, improved customer satisfaction scores, or reduced employee attrition. Using data visualization tools and clear, concise reports helps to effectively communicate our impact.
MT: How has this focus on financial acumen impacted the role of the L&D leader?
JZ: It means we need to be more strategic and data-driven leaders. We need to be constantly looking for ways to improve the ROI of our programs and demonstrate the value of L&D to the organization. It will force us to build stronger relationships with other departments, particularly finance and operations. By understanding their needs and priorities, we can better align our L&D strategies with the overall business objectives.
MT: What are some of the challenges in demonstrating the financial value of L&D?
JZ: One of the biggest challenges is quantifying the soft benefits of training. How do you put a dollar value on improved morale or increased creativity? We need to find innovative ways to measure and demonstrate these intangible benefits. Another challenge is staying ahead of the curve. The business landscape is constantly evolving, and we need to continuously adapt our strategies and metrics to reflect these changes. For example, the rise of AI and automation will undoubtedly impact the skills needed by our workforce, and we need to be prepared to adapt our training programs accordingly. Simply having AI tools will not be enough. Training learners when and how to use the tools will be required and that landscape will be constantly shifting. We will need to stay ahead while also connecting back to the value we bring.
MT: What advice would you give to aspiring L&D leaders?
JZ: Embrace data. Develop strong analytical skills. Build strong relationships with key stakeholders. And most importantly, never stop learning. The field of L&D is constantly evolving, and we need to continuously adapt and grow to remain effective. By embracing our role as financial stewards, L&D professionals can elevate our impact, demonstrate the value of our work, and drive organizational success in the years to come.
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