ROI test

Why most financial professional development programs fail the ROI test

Recent hiring reports disclose that one of the greatest challenges companies face is a lack of properly-skilled workers.  In the United States, unemployment at an all-time low and the number of job vacancies at a high point.  Simply put, it’s a peculiar time in the U.S. as companies are struggling to fill open jobs because the pool of qualified candidates seeking work is too small.  What’s even more interesting is not just that there aren’t enough qualified candidates seeking employment; it’s the currently-employed professions don’t possess the complete suite of skills that the company needs them to.  How could this be possible? 

In 2018, companies spent $87.6 billion on corporate training and development across the United States alone.  Companies are willing to spend heartily on training, however the return on investment (ROI) of professional development programs is far lower than desired.  It begs several questions be asked and answered:

  1. Is the education that young people are getting in school failing to prepare them for the financial working world they are entering?  And if so, why?
  2. Why do experienced non-FP&A finance professionals lack the skills their companies need them to possess?  Why is there such a disconnect between the skills current FP&A professionals possess and the skills companies need?
  3. When addressing this disconnect, why do companies feel like they’re wasting money on financial training programs intended to upskill their people?
Point #1: Lack of FP&A education at universities

Very few undergraduate universities, and even graduate programs, offer curriculum directly addressing disciplines under the FP&A umbrella.  The academic world still largely revolves around credentials such as tests and test scores, but that’s not how today’s business world works.  In fact, it never has worked that way.  This all means that when professionals enter the workforce, very few possess the technical skills needed for higher-level FP&A work.  It is often those individuals with MBAs or several years of experience who find themselves in FP&A management or on track for financial leadership. 

Point #2: Lack of necessary skills and experience

Regardless of whether someone is in FP&A or not, without a well-thought-out development ecosystem, it is difficult for financial professionals to develop the skills and experience necessary to evolve within FP&A.  One of the greatest challenges is that the skills needed early from FP&A professionals often don’t develop until several years into the job.  While the maturity of technical accounting and finance acumen takes place early on, critical-thinking, problem-solving, and effective communication often aren’t as robust as desired at the same stage.

Point #3: Insufficient training

A loaded question, development of FP&A talent requires more than one-and-done training.  While many companies are increasingly investing in e-learning, virtual platforms by themselves have notoriously low participation and completion rates.  In fact, studies by Stanford, Penn State, and University of Texas-Austin, report a dismal percentage of participants completing massive open online courses (or MOOCs).  In some cases, it’s fewer than 15%.  Online training portals such as Udemy and SkillShare have even more disappointing results.  Finally, investment in live in-person programs are often celebrated as short-term wins but a long-term waste of money, because of a failure to hold attendees accountable and implement the learnings.

With these challenges, how can companies attract excellent FP&A talent, nurture their growth, and ensure they’re getting an excellent return on their development programs? 

Some of the biggest shortcomings in professional development are focusing too much on compliance versus education, focusing too much on content and not enough on increasing business intelligence, and focusing too much on skills with not enough focus on implementation.  While L&D may be tasked with bringing in development programs, FP&A should be tasked with crafting the programming and helping L&D determine ROI.  While a small handful of companies have adopted excellent development models – Cigna, Johnson & Johnson, and Raytheon to name a few – most organizations have not.

Instead of offering one-and-done live programming and mass open online courses, FP&A development programs should include long-term commitments to various financial disciplines, maturity models, and real-world challenges which are likely to be encountered throughout a professional’s work-life.  Specifically, these commitments should address: career mapping, cross-training, rotational programming, mentoring/coaching, and blended live/virtual upskilling.  This requires a vastly different philosophy than we’ve seen in the last decade, in FP&A and across many other functions.  While we’ve seen it succeed at several blue-chip companies and news-worthy start-ups, to say there is an enormous chasm across the majority of businesses, would be an understatement.

If an excellent ROI is to be realized in learning and development, what matters most is learning effectiveness and not the modality of how learning happens.  The core elements of successful learning & development, in FP&A or otherwise, are real-world context, realistic practice, spaced repetitions, and authentic feedback.  Any training and development programming that lacks one or more of these core elements should be dismissed or amended to ensure such factors are included.  When a company overlays such training with the long-term commitments noted above, they are better positioned to attract and nurture excellent talent.  While only a small handful of companies are doing this successfully, there is no reason others cannot join the ranks.  Establishing an ROI is vital to measuring the success of professional development programs and FP&A is well-positioned to offer this insight.

Unit4 Financial Planning & Analysis makes it faster and easier for your people to understand what really matters and apply that knowledge to turn your organization’s plans and ideas into action

Carl Seidman

Carl Seidman

Carl Seidman is a trusted and disciplined advisor specializing in financial strategy and business transformation. He has dedicated his career to guiding healthy companies through strategic growth and aiding stagnant, under-performing, and distressed companies through turnaround or revitalization. He is a highly sought-after keynote speaker and trainer in the field of FP&A, business modeling, and Millennial career development. Carl is a CPA and possesses other professional credentials in insolvency and restructuring, valuation, fraud, and financial forensics.