Financial Organizations Lack Effective Training: Report
Flat training budgets present workforce challenges amid a flurry of regulatory changes.
Most training programs aimed at finance professionals receive a failing grade from business executives, according to a new survey by KPMG, a tax and advisory firm based in New York. The challenge will intensify amid a flurry of regulatory and accounting changes during the next several years, with companies anxious to close skills gaps while facing likely budget constraints, the report finds. The KPMG 2012 Human Capital and Learning Survey, released Nov. 8, polled more than 100 human resources, accounting and finance directors.
"Half of the participants say they need to invest in new training because existing training programs aren't effective. That's a pretty significant number," says Patricia Maslov, executive director of KPMG Learning, which provides training and continuing education to corporate financial professionals.
The most pressing issue: pending changes to generally accepted accounting practices, or GAAP, which U.S. companies have long used when compiling financial reports. Moreover, yet-to-be-implemented rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act add another layer of complexity.
"The change is compounded by the fact that not all the standards are out yet. Companies are left trying to prepare for the future without having all the information they need," Maslov says.
Fifty percent of executives cite investments in new finance and accounting training as a critical element in their company's ability to compete. Yet, nearly as many execs (44 percent) say "finding sufficient funds and resources" poses the biggest challenge, with a combined 78 percent of companies expecting training budgets to either remain flat or decline next year.
Less than one-quarter (22 percent) expect their organization's training budget to increase next year. Meanwhile, 61 percent predict internal spending on employee training will remain flat, and 17 percent of organizations are bracing for budget cuts.
The findings hint at other potential obstacles facing financial organizations. For example, two-thirds of business executives peg the ideal level of training for employees between 21 and 80 hours a year. However, 40 percent acknowledge that employees presently are required to take up to only 10 hours of training a year.
Finance and HR execs have starkly different assessments on the value of existing training offerings. Only 22 percent of financial executives rate their company's programs as excellent—exactly half that of HR executives who hold a similar view.
While 38 percent of finance executives say they "would simply welcome an increase in training," senior HR leaders believe it's more important that training be specific, relevant and targeted to plug identified skills gaps.
The good news is the rapid changes are forcing organizations to assess their training, identify which programs might be in order, and focus on targeted workforce development, Maslov says. "For companies with a finite amount of training dollars, it's more important than ever to spend those dollars wisely."
Garry Kranz is a Workforce contributing editor. Comment below or email email@example.com.