Calculating the ROI of Learning

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Training budgets are tempting targets during tight times, but should firms really cut expenses in this area? According to Gartner Research, every hour of information technology training provides 5.75 hours of increased capacity. How did they reach this conclusion? By adding:

Experimentation: 4.5 hours. It takes an untrained worker twice as long to figure it out on their own.

Support: .25. Every hour of training reduces help desk or support time a quarter of an hour.

Partner Insights

Rework: One hour. Every hour of training reduces review and fixing errors one hour.

These statistics are enlightening, but do not address the end user's confidence level. A confident individual learns faster and is more capable of applying new knowledge to current projects and the work environment. This is particularly true for partners and administrative personnel, who often don't receive training for numerous reasons.

BEYOND CPE

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.

Other industries have leveraged technology to increase production while reducing the number of jobs. Consider the agriculture industry. In 1900, more than 50 percent of the U.S. workforce was employed in agriculture. That was down to 3 percent in 2000. Yet production was 10 times as high, due primarily to technology. Manufacturing has also increased while the number of jobs has decreased.

Change is required 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 the rate of change is increasing. Today's workforce requires continuous training and learning in technical skills, soft skills and IT, a requirement that can average 150 hours annually basis.

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

The biggest mistake to delegate this responsibility to someone not trained as an educator who focuses on education only when they have extra time.

IMMEDIATE RESULTS

Here are some areas where firms will see immediate, productive results in the technology area with 10 hours of investment:

* Email management (six hours)

* Document management/records retention standards (one hour)

* Search techniques (one hour)

* Word tips and techniques (one hour)

* Excel tips and techniques (one hour)

A significant amount of time is devoted to e-mail management. Most firms have not provided training in use of Microsoft Outlook as a records management database, rather than a mailbox.

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 version and link related documents. Most have add-ins to Outlook that makes this process relatively easy. One hour is minimal for the other topics.

The choice is yours: Continue to invest in your most important asset, people, or allow their skills to deteriorate. Everyone should be a lifelong learner and educator in order to maximize individual potential and productivity. The cost is minimal for an increase in revenue per employee.

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 investment, even if you offset the additional revenue with the opportunity cost for hours spent in the classroom. And your staff will be smarter and more confident.

Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.

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