VA Kicks Off a Study Skills Pay Dividends – Accounting for Human Capital

7 February 2024/Study

Increasing employer training investment and enhancing its visibility in company financial accounts are pivotal strategies in today’s competitive landscape. Not only does investing in employee training foster a skilled and adaptable workforce, but it also enhances organisational agility and innovation, critical factors for success in rapidly evolving markets. By making these investments more visible in financial accounts, companies can effectively communicate their commitment to talent development and demonstrate the long-term value it generates. Moreover, showcasing the worth of such investments as value creators for the company can attract top talent and instill confidence among stakeholders, including shareholders and customers. Ultimately, this transparent approach reinforces the notion that investing in employees is not just a cost but a strategic asset that drives sustainable growth and competitive advantage in the marketplace.

VA team is excited to inform that we are working on a study for DG EMPL titled “Skills pay dividends – accounting for human capital: how to increase employer training investment and make it more visible in company accounts”. The aim is to explore ways to increase the visibility of spending on training in financial accounts and in particular, the visibility of their worth as an investment creating value for the company.  Specific objectives of the study are to: (1) propose ways on how such training expenditure could be measured; (2) support improved mechanisms for companies to monitor and assess the return on investment in training of employees and provide an evidence base that can support strategic decision-making; (3) facilitate a holistic basis to company valuation. The study is expected to support the implementation of Action 12 of the European Skills Agenda, which aims to improve the framework for private investments in skills.

To implement the research VA is collaborating with CSES through desk research, interviews, mapping, and case studies to:

  1. Define and scope the problem that needs to be addressed.
  2. Map the existing approaches that consider investments in skills and other intangibles.
  3. Review the literature to identify potential solutions to the problems discussed in academic debates.
  4. Conduct case studies and consultations to develop policy options.
  5. And finally, assess the policy options available.

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