The Training Mindset: Mapping Firm Attitudes to Performance

Woman training man at computerWhat Corporate America knows that CPAs ignore: Training pays.

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By Michael Ramos
Michael Ramos + Associates

To maintain their licenses, professionals are required to meet annual continuing education requirements. To practice in certain areas (e.g., government audits) or maintain a designation (e.g., Certified Financial Planner, Certified Fraud Examiner) also requires continuing education. Thus was born the multibillion-dollar continuing professional education industry, to meet the needs of millions of professionals forced to comply with continuing education requirements.

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MORE:  Top CPE Trends: How Accountants Are Re-Tooling for 2017  |  CPE Survey: Why Some CPAs Are Focusing on Accounting & Financial Reporting This Year |  Ohio CPA Society Teams with CPA Trendlines to Improve CPE ROI  |   How to Choose the Right CPE  |   The Missing Link: Developing Your People to Achieve Profitability  |

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Outside of the professions, most businesses face few if any mandated training requirements. Though not required, businesses still train their employees regularly and at great cost. One study shows that the typical small business trains each employee an average of 40 hours each year – the same as a CPA.

Sadly, most CPA firms do not share this mindset. Whether it’s because of the overt regulatory nature of professional CPE requirements or for some other reason, compliance with licensing requirements continues to be a major driver for training at most CPA firms. Few firms approach training as an investment of strategic value.


How to Build a Powerhouse Learning Team for Your CPA Firm

Create competitive value by combining practitioners and educators on the same team.

By Michael Ramos and Cate Miller

CPAs bring a diverse range of skills to any business problem. At small firms, partners wear many hats, including management of the learning function. But as firms grow, it soon becomes apparent that one of the firm’s partners – no matter how talented he or she may be – is not functioning at their highest and best use if they have to manage the entire learning function on their own.

Training And Development  Part 3 in a 3-Part Series: Run Training Like a Business

     Part 1: 4 Steps to Get More from Your Training Budget

     Part 2: How to Manage CPE by the Numbers

     Part 3: How to Build a Powerhouse Learning Team 


With size comes a diversity of learning needs and management of the learning function becomes more complex. The opportunity cost of having firm partners and managers limit their billable hours to coordinate training begins to outweigh the costs of engaging the help of a learning professional.

Thus is born the need for a learning team.


How to Manage CPE by the Numbers

Developing and monitoring learning metrics.

By Michael Ramos and Cate Miller

Accounting is the language of business. CPAs help business owners understand and manage their business by analyzing financial and non-financial metrics. To improve the results of the firm’s professional development efforts, those same financial management skills can be used to manage the learning function.

Training And Development   Part 2 in a 3-Part Series: Run Training Like a Business

     Part 1: 4 Steps to Get More from Your Training Budget

     Part 2: How to Manage CPE by the Numbers

     Part 3: How to Build a Powerhouse Learning Team


Measurable goals provide:

  • Credibility to the learning strategy. CPAs value measurable results, and communicating measurable learning goals across the firm signals that leadership is committed to professional development and supports developing the firm into a high-impact learning organization.
  • Basis for accountability. Performance improves when people have a clear understanding of what is expected and are held accountable for meeting those expectations
  • Foundation for continuous improvement. “You get what you measure.” It’s human nature to seek to improve in those areas where performance is being measured

Take Action. Define the most important goals for the firm’s learning function. Direct the learning team to develop financial and non-financial metrics to monitor progress toward achieving those goals.

Prepare a Budget and Use It to Manage the Learning Function

Unfortunately, when it comes to managing the firm’s learning investment, many firms do without a budget. The lack of a budget means that firm leaders make critical decisions about learning investments without all relevant information. Or worse, critical decisions are not made and poor performance from the past is carried forward.

Best practices for preparing and managing the learning budget include the following.

  • A true budget. The learning budget should be prepared with the same discipline that is used to forecast revenue. For example, revenue is tied to underlying revenue generating events. Likewise, learning costs should be budgeted based on learning events and projects and budgeted on a monthly or quarterly basis. Annual lump sum budgets spread evenly throughout the year are not nearly as useful because they give a distorted view of learning department performance.
  • Centralized. Decisions about how to spend learning dollars may be decentralized, but the firm needs one central learning budget that consolidates the projected and actual learning expenses across the entire firm. The learning department should have direct oversight of the budget and then be held accountable
  • All in. Budgets should include both hard and soft dollars. Hard costs include fees paid for third party content and instruction, travel, technology fees, consultants, etc. Budgets that include only hard dollars and external spend will be incomplete and may be unsuitable for making many decisions. For that reason, firms should capture the time spent by firm partners and employees to manage, develop and deliver learning. Don’t underestimate the true cost of developing course materials and preparing for delivery. Learning industry rule of thumb is that it takes 40 hours for 1 hour of class time to design and prepare the delivery of a successful course
  • Organized to Facilitate Analysis. To make decisions about learning, firm leaders should be able to:
    • Differentiate between fixed and variable costs.
    • Align budget to L&D value chain. (Refer reader to article #1)
    • Analyze costs by service line and/or industry.
    • Analyze costs by course type; by instructor; by class
      Analyze costs by individual program or course over its entire shelf life
    • Differentiate between internal and external spend;

The purpose of the budget is to help decision makers make better decisions. To achieve that goal does not require the learning budget to be overly precise, and to be sustainable the budget cannot be too complicated to prepare. If the firm does not have available all the information necessary to create the ideal budget, make a good faith estimate, document your assumptions, and move forward.

Firms that have not previously prepared firm-wide learning budgets and cost summaries may be surprised at the size of the “all-in” learning investment. The knee jerk reaction may be to undertake a cost-cutting exercise. Avoid this reaction. It may be true that the firm can achieve the same or better results with a lower dollar investment, but cutting the learning budget is best done using a scalpel, not a hatchet, and only after careful analysis. For more on getting a bigger “bang for the learning “buck,” see ”High-Impact Learning: 4 Ways to Maximize CPE ROI” by Michael Ramos, previously published in CPATrendlines.

Take Action: Describe the ideal budget and financial metrics firm leaders need to manage the learning function. Compare that ideal budget to the one currently in place, and map out a multi-phase plan to get the firm from where it is now to where you want it to be.

Develop Non-Financial Metrics to Help Manage the Learning Function

Measuring and tracking several easy-to-determine non-financial metrics will help firm leadership gain a more complete picture of learning department efficiency and productivity.

Usage Metrics provide insight into how much and in what form firm accounting professionals consume learning. For example, if the firm invests in the development of e-learning programs, knowing how many on-line CPE credit hours were consumed and by whom will allow the firm to assess the ROI of its online learning development efforts. Knowing the ratio of firm-provided CPE to total CPE consumption may provide insight into the “market” assessment of the quality of firm-provided learning. Common usage metrics include:

  • Number of total and unique participants
  • Number of CPE credit hours consumed
  • Total number of CPE credit hours consumed (both internal and externally-sponsored)

Content and Development Metrics help assess the productivity of the learning function. Common content and development metrics include:

  • Number of unique course offerings
  • Number of new courses developed or added to the catalog
  • Number of unique learning events
  • Number of hours spent by accounting firm professional on course development

Headcount can be an important denominator to assess efficiency and plan for expanding the learning function as the firm grows. Headcount should include both learning and accounting professional FTEs. Useful ratios include:

  • Number of CPE credit hours consumed per learning FTE
  • Number of total and unique participants per learning FTE
  • Number of CPE credit hours offered per learning FTE
  • Number of unique learning events per learning FTE

Determining the proper level of detail to provide for each metric is more art than science. More granularity can help pinpoint what the firm is doing well and where improvement is needed. However the cost of gathering and maintaining detailed learning metrics can not outweigh the benefit.

In general, most firms track metrics by:

  • Delivery modality
  • Technical subject area
  • Program (e.g., tax staff training, new manager training, etc.)
  • Service line, industry, office, or other business unit

Take Action: Determine the non-financial metrics that would be most useful in monitoring the progress of the learning team toward achieving its annual goals. Evaluate the level of effort required to regularly capture and report these metrics and develop a plan for implementation.

Managing By the Numbers is a CPAs Sweet Spot

CPAs understand and appreciate the value that financial and non-financial measures play in managing a business and driving performance. That same measurement discipline can and should be applied to the firm’s learning function to help drive improved performance.


Michael Ramos is the principal of Michael Ramos and Associates, a learning consultancy firm that works with CPA firms and organizations that provide products and services to the profession to help them develop and deploy high-impact learning programs. He has over 25 years of experience developing and delivering competency-based professional development programs and is the author of numerous auditing books and guides. He also served as the Director of CPE and Training at the AICPA.

Cate Miller, CPLP, PHR is the Director of Learning & Development at Dixon Hughes Goodman LLP, a position she has held for over six years. In that role she has oversight of the firm’s learning function and is charged with aligning the firm’s learning programs to organizational goals and objectives. She has over 20 years of learning and talent development experience and holds an MBA from Roosevelt University.

4 Steps to Get More from Your Training Budget

How to run your training like a business.

By Michael Ramos and Cate Miller

With CPA firms spending 1.5 percent to 2.0 percent of revenue on learning, budgets can be hundreds of thousands of dollars even for a modest-sized firm. But firms invest in learning because it is a critical component in addressing many of the top issues facing CPA firms today.

Training And Development   Part 1 in a 3-Part Series: Run Training Like a Business

     Part 1: 4 Steps to Get More from Your Training Budget

     Part 2: How to Manage CPE by the Numbers

     Part 3: How to Build a Powerhouse Learning Team


The best organizations view learning as an investment, and they manage their investment the same way a venture capitalist manages a portfolio company – like a business. Unfortunately, many CPA firms have a less disciplined approach to learning, which means they’re probably leaving money on the table. READ MORE →

Three Tips for Creating Training Metrics

Plus: Effective budgeting and management.

By Michael Ramos
Michael Ramos and Associates

CPA firms want to establish metrics for their learning function as a way to monitor and manage their learning activities. Ideally, firms would do their learning strategies and goals first and then use these strategies to drive the related metrics.

But we do not live in an ideal world, and some firms choose to establish metrics while simultaneously working on firmwide learning structures and goals.

MORE: High-Impact Learning: 4 Ways to Maximize CPE ROI

Recognizing the risks inherent in prematurely defining metrics, here are three tips for creating meaningful learning metrics at your firm that will help manage the learning function and drive performance. READ MORE →

High-Impact Learning: 4 Ways to Maximize CPE ROI

And the fatal mistake CPA firms make in their training budgets.

By Michael Ramos

For years CPA firms have tried to measure the ROI from their learning and development spend, an effort that has produced mostly unsatisfactory results.

Standard learning and development metrics provide some insight into the training function, but firm partners are more interested in measuring something much more elusive: tangible economic benefit from training spend.  What the profession has struggled with is, while measuring costs is easy, measuring direct return has proven to be quite difficult.  Faced with an incomplete ROI model, firms turn to the only side of the equation they can control, the cost side, which leads them to take the only option that seems viable – cutting costs as a way to drive ROI.

The problem is firms are asking the wrong question. Instead of focusing on precise measures of return on training dollars, CPA firms would be better served by asking the more subjective question, “What should we do to make sure our training dollars are being spent wisely?”  The answer to that question may lack the precision firm leaders desire, but it does have one distinct advantage over precise objective measures: It is a question firms can answer.  And the answer, if thoughtfully considered, may achieve the ultimate goal: providing high-impact training at an affordable cost. READ MORE →

Four New CPA Opportunities for the New Economy

CPA Mike Ramos sees government policies moving the economy in a new direction.

This will affect your clients’ business — and their business needs. Your opportunity is to provide a service to address those changing needs.

Four promising areas to consider:

1. Tax planning and compliance: The American Recovery and Reinvestment Act (ARRA) — dubbed the stimulus package — brought major changes to the tax code. So does the Obama administration’s budget. The tax code overhaul offers significant opportunities in tax planning and compliance.

2. Services for state and local governments: Firms skilled in audits of state and local governments and the requirements of OMB Circular A-133 are well positioned to expand their practice. The ARRA’s reporting requirements go far beyond existing rules for those receiving federal funds. ARRA fund recipients have many questions.

3. Services for nonprofit organizations: Many nonprofits are receiving ARRA funding. They face the same issues facing state and local government receiving ARRA funds. Moreover, many nonprofits will face another challenge: preparing for their first A-133 audit.

4. Renewable energy: Keep your eye on wind, solar and other renewable energy sources. The Obama administration has signaled it will make significant investments in the rapidly growing renewable energy sector.

In these historic times, Ramos says, CPA firms that decline to change their pre-2007 business model risk being overtaken by competitors.

via Four Trends CPAs Need to Know.