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Gaining the most from your training dollars: a systems approach to staff training.

Clients of public accounting firms demand quality performance, yet they often choose accountants based on price. Firms hoping to compete in this environment must achieve high productivity for price-competitive, quality accounting services. Continued investment in training is not a luxury, it is a business imperative. However, relatively few firms apply a systematic approach to assess training costs and benefits; nor adequately evaluate alternative mechanisms for training. Training costs are significant and firms waste their investment when training fails to produce measurable outputs that contribute to bottom-line results. Accounting firms must apply an organized approach to analyze training needs and to identify cost effective programs to meet those needs.

Needs Determination

Sometimes, training needs are obvious. Recent college graduates need guidance to help them bridge the gap between classroom and practice. Tax staff are required to update their knowledge in order to keep abreast of changes in tax code provisions. Training is also apparent when staff are assigned outside their areas of expertise. Other training needs are less obvious since determinates of staff deficiencies may be other than technical inadequacy. (See Figure 1.)

Deficient performance may be knowledge based, but it may be related to employee motivation, to organizational communication or to management. Each cause may be mitigated or resolved through training, but underlying causes must be isolated. If poor communication by supervisors is undermining staff performance, training is an appropriate remedy, but training will be wasted if it is directed only to staff. It is management's responsibility to apply a diagnostic approach that goes beyond identifying the symptoms of poor performance, to prescribing appropriate remedies to correct underlying causes.

A combination of individualized and firm-wide diagnostic approaches is appropriate. Performance appraisal systems are useful in identifying training needs. Firms can supplement this data by surveying personnel through a formal "Training Needs Assessment" questionnaire. Planning for promotion and for staff assignments should include developmental needs related to the new assignment. Finally, industry developments and client needs must be assessed in terms of their ramifications for staff training.

Supervisors play a crucial role in linking performance appraisal to training. Counseling sessions integrated into employee appraisal provides valuable employee feedback. The outcome of counseling sessions should be mutual agreement between supervisors and staff on employee performance and on appropriate action, including training, to correct deficiencies. Often, mis-diagnosis of training needs occurs when firms do not support open communication between supervisors and staff.

A formal Training Needs Assessment Questionnaire contains a list of job tasks organized by position and an indication of:

1. The percent of total time spent on each task;

2. The difficulty of the task; and

3. Training needs related to job tasks.

Assessment questionnaires should be prepared for each person by both the supervisor and the staff person. Responses to questionnaires are compared and reconciled to reach agreement on training needs. This analysis ideally should be conducted annually for all personnel.

Promotions or reassignments provide opportunities to explore training needs. Previous experiences may not adequately prepare new job holders for their expanded duties. Similarly, changing business conditions dictate that firms restructure skills and technical competencies. It is important that management closely monitor client developments and environmental changes. Firms need to take a proactive approach to change; clients tend not to wait long for firms to develop required capabilities, especially when competitors possess those capabilities.

Program Selection and


No single approach will meet all a firm's training needs. Each training need ought to be separately considered to determine method of implementation to meet the need. Alternatives exist and should be evaluated in terms of time and cost requirements. Impact and effect of similar programs vary, and management must be an informed consumer of training services.

Management's initial determination is whether to provide training in-house or externally. In-house training programs can be tailored to a firm, but they also can be extremely costly. If the training need affects many staff on an ongoing basis, then it may be effective to develop inhouse expertise to provide the coverage. Costs of initial sessions will be recovered over time through program repetition. However, this presumes that the firm has personnel who are both capable of developing and presenting the training and who generate the best returns when used in that capacity. The greatest cost of inhouse training is often an opportunity cost based on the next best use of instructor's time. If a training need relates only to a few staff, or if it is tied to new technical developments, training may best be provided by outside agents. For instance, to determine the application of the uniform capitalization criteria for inventory, many firms sent members to technical seminars. Conversely, in-experienced staff typically are taught how to fill out simple personal or corporate tax forms through a combination of on-the-job training and firm-developed procedures and checklists. The difference between approaches relates to the technical difficulty of material and to the number of personnel experiencing the need.

When firms decide to explore outside providers of training, there are a bewildering range of alternatives: professional consultants, programs sponsored by local, state and national accounting societies, offerings by other professional associations, and university-provided training. The following should be considered in evaluating alternatives:

1. Does the program correspond to the training need?

2. Are instructors competent and knowledgeable?

3. Is the training approach effective?

It appears obvious that program content, objectives and goals should be matched to training needs, but many training dollars are spent simply because of program availability. Groups presenting seminars and programs try to market to the broadest possible audience, and their literature tends to imply global benefit to all participants. But, firms need to assess whether the content and objectives of the specific program meet their pre-defined needs. Needs assessments are conducted to identify areas of greatest potential benefit. If firms ignore the output of their needs assessment and simply respond to marketing hype, they are unlikely to wisely spend training dollars. This does not imply that management should ignore program literature that comes across their desks; it can help to identify unrecognized needs, and it does provide information on alternative delivery vehicles. However, management's choice of training activities and venues should be a reasoned response that supports a planned and coherent employee development strategy.

Quality of programs varies widely and program catalogs may contain inadequate descriptions of program content on which to assess value. Unless the program is part of an ongoing series where potential clients are able to check recommendations of previous participants, the best indicator of program quality will be the qualifications and achievements of instructors. However, program presentation by highly accomplished individuals still does not guarantee a good result if the structure and approach of the seminar does not correspond with its goals and objectives.

There is no single appropriate training approach. Different formats and methods are suited to certain objectives. Management must assess whether the program under consideration is structured to meet firm needs. If the objective were to sensitize trainees to the economic impact of the elimination of internal trading barriers in Europe, then a panel discussion with wide-ranging and free flow of ideas is likely to be an effective format; the same format would be inappropriate if the objective were to obtain specific recommendations on statutory reporting requirements of European subsidiaries of U.S. companies.

If the training objective is development of technical expertise, the training format and delivery should emphasize active participation of trainees and provide for repetition. A lecture coupled with a video presentation, followed by a programmed exercise, provides more effective learning than does a stand-alone lecture. Conversely, if the objective relates to intepersonal relations, programs failing to emphasize group dynamics and team-building exercise are ineffective.

Programmed learning exercises have been widely marketed as business training tools. When training objectives are narrowly defined and specific, such as learning to apply a computer spreadsheet package, programmed learning can be highly effective. However, programmed learning materials are extremely costly to develop for firm-specific applications, and bought-in training material may not be well-tailored to a firm's situation. Further, this approach requires participants to be self-directed and able to apply the knowledge with little additional direction.

Results Assessment

All training should be subjected to a cost/benefit analysis. Identifying training costs and quantifying training benefits are imprecise activities since both measures are subjective. Still, firms need to establish formal methods that attempt ro capture these costs. Absolute precision willnot be achieved, but that is not necessary for cost/benefits assessment of training.

Cost Identification is the simpler part of the model. Direct expenditures for training are readily identifiable if a firm's accounting system provides line identification for training expenditures. Specific accounts for training costs ought to be assigned and administrative procedures established to ensure that charges are properly made to those accounts. This works well for direct or attributable costs of training, such as costs for related travel or seminar fees. Unfortunately, a significant portion of total training investment will not be reflected in accounts because it consists of opportunity costs.

Opportunity costs add the subjective element to training cost which makes its measure imprecise. Staff time represents a major training cost; significant commitments are made by firm members who prepare and present training, as well as by the staff being trained. While internal reporting systems track staff time, both the billable portion and administrative time, the reporting is subject to error or outright manipulation. There may be a temptation to attribute excess time to training activity rather than to dead time or staff available.

Opportunity costs exist only where something has been foregone in order to pursue the training activity. Consequently, time charged to training ought to be closely assessed. A significant portion of the time spent will not represent a true opportunity cost and therefore should be excluded from the cost/benefit matrix. In practice, reported hours spent in training ought to be discounted at some consistent rate that must be estimated by firm management.

Benefit measurement entails determination of whether the program accomplished firm objectives. Paradoxically, the value of training must be determined in advance by management. Benefits assessment attempts to evaluate whether prior decisions were appropriate. Consequently, there may be built in bias to assign value to training outcomes in excess of that justified. However, firms can apply standardized assessment techniques to minimize this effect.

At minimum, participant evaluation of training programs should be mandatory. Staff should rate the program, the presenters and the outcomes of the program. Management may choose to do this through formal checklists, questionnaires or itemized evaluation instruments. Often it is appropriate to require trainees to prepare a short narrative of what specific skills, knowledge or understanding was gained. This should be compared to the pre-defined needs specification to determine to what extent training objectives were met. A feedback loop should apply this information to future training decisions.

While the post-training assessment provides one measure of benefit, training benefits are multidimensional and may be recognized in both the short and long term. There is a reward element to training. Training has been proven effective in reducing staff turnover and the associated costs of recruiting. Productivity over the long term is tied to skills and motivation, but short term there is often difficulty identifying a strong relation to training programs unless the training has been very narrowly defined to specific technical skills or knowledge. Consequently, management's assessment of the range of training benefits is subjective, but the assessment should be performed because the process itself has high value.

When firm management directly address whether training is providing benefit equal to its cost, management is forced to also consider the underlying rationale for training and the decisional process that was applied to determine the specific activities in which to engage. The systematic training model can be viewed as a recursive system in which training outcomes are constantly evaluated against costs in order to adjust future training to more adequately meet specific training needs. Consequently, whether management's estimates of costs and benefits are accurate is a secondary consideration to whether management performs a systematic and ongoing assessment of the efficacy of the firm's training programs.

Steven A. Fisher, DBA, is an associate professor of accounting at California State University, Long Beach. He earned a DBA from Kent State University and has published extensively in numerous accounting and business journals.

Gary B. Frank, PhD, is an associate professor of accounting at the University of Akron. His PhD was awarded by the University of Illinois. He has published widely and has extensive experience in management development and training.
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Title Annotation:training of accountants
Author:Fisher, Steven A.; Frank, Gary B.
Publication:The National Public Accountant
Date:Mar 1, 1992
Previous Article:H.R. 1485: fairness in U.S. Tax Court.
Next Article:Auditing employee benefit plans.

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