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The Boomer Bulletin - 2010
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The ROI On Learning

Posted By Gary Boomer, Sunday, December 20, 2009
L. Gary Boomer

Training budgets are tempting targets during tight times, but should firms really cut expenses in this area? According to Gartner Research, every hour of IT training provides 5.75 hours of increased capacity. How did they reach this conclusion? According to Gartner’s research, the savings are tabulated by adding:

  • 4.5 hours of experimentation – it takes an untrained worker twice as long to figure it out on his or her own.
  • .25 hours of support – for every hour of training, help desk or support time is reduced by .25 hours.
  • 1.0 hour of rework – review and fixing errors is reduced by 1 hour for every hour of training.

These statistics are enlightening, but they do not address the end user’s level of confidence. A confident individual learns faster and is more capable of applying new knowledge to projects and processes. This is particularly true for partners and administrative personnel in an accounting firm. They often don’t receive training for numerous reasons, including busyness, resistance to change and fear of exposing any lack of skills in front of less experienced staff. Accounting firms also utilize more applications than most other industries (production and back office).

While most firm leaders agree that training is important, their viewpoints about what it entails are often myopic. Training involves more than CPE credits for maintaining a permit to practice. It should also include soft skills (team building, management skills and leadership) as well as IT skills (core applications, productivity tools and firm standards, policies and procedures). Great firms realize that 40 hours is not nearly enough and have leveraged the learning process in recent years. As a result, these firms are getting smarter and increasing capacity.

Accounting firms will have to increase production with fewer people in the future. Other industries have leveraged technology to increase production while reducing the number of jobs. Consider the agriculture industry. In 1900 over 50% of the U.S. workforce was employed in agriculture. As of 2000 approximately 3% of the U.S. workforce was engaged in agriculture, yet production was 10 times as high due primarily to technology.

Manufacturing is another industry in which U.S. production has increased while the number of jobs has decreased. U.S. manufacturing workers are far more productive than workers in China because of training and investments in technology. The history of business is littered with the remains of those who did not or could not change with the times – buggy whips, steamships, locomotive manufacturers and photographic film producers.

Change is required in the accounting profession if firms want to take advantage of new opportunities and leverage technology to increase productivity. Some will say firms have been doing this for the past 25 years, but I contend the rate of change is increasing. Today’s workforce requires continuous training and learning in three areas—technical, soft skills and IT—a requirement that can average 150 hours on an annual basis.

Firms are hiring learning professionals to administer learning programs, and managing partners are holding others (including partners) accountable. Many firms believe they are too small to justify a professional educator or think they don’t need one on a full-time basis. Smaller firms are sharing these resources with other firms or sourcing to an outside learning coordinator.

The biggest mistake firms make is to delegate this responsibility to a partner or accountant who hasn’t been trained as an adult educator and has a narrow view of education. Plus, this is not that person’s primary job responsibility. They tend to focus on education after completing their charge hour budgets and when they have extra time. This is not a good solution.

Let’s review some specifics in IT that will increase your firm’s capacity significantly in the future, if you will take a few hours planning, preparing and conducting quality learning experiences. Remember that everyone needs his or her own education plan—one size fits one. I have attempted to illustrate areas where firms will see immediate, productive results in the technology area.

Tim

Topic

6 hours

eMail Management

1 hour

Document Storage/Records Retention Standards

1 hour

Search Techniques

1 hour

MS Word tips and techniques

1 hour

MS Excel tips and techniques

10 hours

TOTAL


You will note that a significant amount of time is devoted to email management, because email is where most users (and particularly partners) spend a significant amount of time on a daily basis. Most have not conducted training, and a majority use email (MS Outlook) as a records management database rather than a mailbox. You don’t leave your paper mail in your mail box for months or years and sort it every time you need a letter or document. The same should be true for email.

Risk management and privacy best practices dictate firm standards, policies and procedures. A client’s file is the proper place to store business records. Content management packages are designed to search, organize, control versions, and link related documents. Most have add-ins to Outlook that make this process relatively easy. The other topics are just as important, and one hour is minimal assuming your skills are current.

The choice is yours: Will you continue to invest in your most important asset, people, or will you allow their skills to deteriorate? Training and learning is a two way street, and everyone should be a lifelong learner and educator in order to maximize individual potential and productivity. The cost of education is a minimal investment for firms that desire an increase in revenue per full time equivalent.

Take the number of full-time-equivalents times 50 hours of additional capacity times an average rate per hour (e.g., 20 people X 50 hours X $150 per hour equals $150,000 additional revenue). That is a significant return on your training investment, even if you offset the additional revenue with the opportunity cost of training for the hours spent in the classroom. The other benefit is that the firm will be smarter, and staff will be more confident. This is extremely important in retaining and attracting quality people.

Tags:  Economy  L. Gary Boomer  learning  training 

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