Thoughts on ways to improve the management of professional services firms

Thursday, July 27, 2006

People management in professional services - a training primer 1

Interesting article in Bruce MacEwen's blog, Adam Smith Esq - http://www.bmacewen.com/blog/ - on the war for talent, the challenge faced by law firms in attracting and retaining top talent.

I have mentioned this blog before as one I scan regularly. While it focuses on law, the issues raised by Bruce are of relevance to greater or lesser extent across all professional services areas.

The war for talent Bruce refers to can only get worse given an aging population in developed countries. Better training is - more precisely should be given the way training is often managed in practice - a key weapon in the war for talent. For that reason, this post focuses on training and the training process.

I have deliberately kept the post as simple as possible given that my main audience is not training professionals as such. My aim is to provide a simple primer on training from a management perspective.

The post is written against a background of major change in both education and training. Those interested in the debate on the training side can find out more from the January 2006 Ndarala staff paper Is Training Snake Oil?.

Starting with three general points.

First, at organisational level, training should be thought of as the process by which staff acquire the knowledge and skills they need as they need them. This simple definition draws out certain key points:

  • the focus is on organisational needs
  • training is defined as a process. Attendance at a few continuing professional development seminars or individual short courses is not training in the way I am defining the term, but instead should be thought of simply as training activities.
  • the training process focuses on the acquisition of specific knowledge and skills as needed when needed.

Second, it seems clear that the great majority of knowledge and skills acquisition- probably well over 90 per cent in most organisations, 100 per cent in some - is informal and takes place on the job. This simple statement has significant implications:

  • From experience, most organisations define training in terms of specific defined training activities. This limits the training function to 10 per cent or less of the total knowledge and skills acquisition within the firm
  • The value of the on the job training depends upon the training and supervisory abilities of existing staff. If these are poor, then total learning across the firm will be significantly reduced
  • Firms who want to maximise returns from training need to manage both formal and informal learning.

This brings me to my third general point.

Part of the current debate in training deals with doubts among trainers and others as to the extent of real returns from training. These doubts are partially due to measurement difficulties, what should we be measuring, how should we measure it? But they also flow from the narrow way in which training is defined.

In my view, and this extends my second point, training can offer significant economic pay-backs if, but only if,the training process focuses on and integrates total learning within the firm, including informal learning.

An example from my own experience to amplify this last point.

The engineering profession in combination with the aerospace industry developed the concept of the learning curve, expressed as a" graph that depicts rate of learning, especially a graph of progress in the mastery of a skill against the time required for such mastery." (http://www.answers.com/topic/experience-curve-effects).

Linking this across to our current discussion, in simplest terms, the shorter the learning curve with new staff or existing staff doing new things, the greater the return to the firm.

To illustrate.

Some years ago I had to establish a new section in the Australian Treasury to process applications by foreign investors wishing to invest in Australia. This was my first experience as section head. We were under delivery pressure and were carrying out a new activity in a politically sensitive environment.

Recruitment of staff was difficult and took time. There were general staff shortages compounded by the fact that my new section was in a relatively unfashionable area of the Department. However, we still had to deliver regardless.

I did have access to one staff pool, new graduate recruits. The conventional view at the time was that it took at least twelve months before such staff really became useful. I did not have this luxury, I needed them to be able to do things quickly. So I defined structured on the job training with a graduated mix of process and research tasks, combined with staff seminars, thus mixing formal and informal training.

I was not surprised to find that people improved more quickly than expected nor that I had a generally happy team. I was surprised at the extent of the improvement. I found that it took my people about three months to get to the competence point usually expected at the end of the first year, a huge performance gain. Later when I did an analysis of the 33 or so people I had working for me during this period, I also found that their later promotion patterns had been better than the Departmental average even though their qualification level on entry had been lower than the Departmental average.

This has become quite a long post. I will therefore stop here and extend the analysis in my next post looking at some of the other components in the training process.

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