A seemingly endless array of accounting, compliance, and reporting changes continue to bombard companies in all industries, forcing many compliance and financial executives to revisit their in-house training programs to ensure that they address the complex task of readying employees to implement the required changes.
In addition to long-time Sarbanes-Oxley Act reporting obligations, companies now also have to worry about the Dodd-Frank Act, looming International Financial Reporting Standards, and much more. “We have some pretty major accounting standards that are on the horizon,” says Ted Guy, vice president of financial reporting for truck and engine manufacturer Navistar.
Even if the United States does not make the move to IFRS, many more accounting convergence projects are in the works, bringing changes to standards on leases, revenue recognition, financial instruments, and other areas. “The pace of change and the number of things that companies will have to go through is unprecedented,” Guy says.
All that presents an equally daunting challenge for companies: keeping employees informed about new accounting and reporting standards, all while avoiding training fatigue. An effective training program, say experts, is about building that into the corporate culture, motivating middle management to push the training out to employees, and encouraging employees to complete it.
There are so many new regulations, accounting changes, and compliance issues, that some companies are forced to pick and choose where they want to aim their limited training resources. Compliance executives go where the risks are first. “Make sure you look at your company's specific risks, as well as industry and systemic risk,” says Doug Allen, senior risk analyst at ethics and compliance consulting company Corpedia.
Navistar, for example, gets its ideas for training topics both from the industry risks discussed in the public sector, as well as from internal subject-matter experts. The actual administration of the training, however, is “a very mechanical and time-consuming process,” Guy says.
To streamline that process, some companies are taking a more holistic approach to risk training, says Kevin Ford, head of strategic solution advisory at Regulatory Data Corp. Rather than focus on the regulations themselves and what they spell out, they dwell on individual departmental concerns. They communicate to employees: “In your department, these are the situations you might encounter. These are the red flags to watch out for. This is what you need to do if you encounter a problem,” he says. According to Ford, training employees on the specifics of individual regulations can be ineffective. “When [employees] get this type of silo training, I think it just confuses them,” he says.
“Most training packages are delivered on an annual basis or less. How effective is that really?”
—Kevin Ford,
Head of Strategic Solution Advisory,
Regulatory Data Corp.
“One thing that works very effectively is to cite recent cases,” Ford adds. Practically speaking, employees need to know what a potential violation looks like and report it to the appropriate person, he says. In some cases, companies present cases “ripped from the headlines” to demonstrate not only what a compliance failure looks like, but also the severe consequences that can result.
Employee Interactivity
Rolling out the training is only half the battle. For many companies, the real challenge is “encouraging employees to put forth the effort and actually complete the training,” says Allen.
“You can't get people to change behaviors until they change their attitudes, and you can't get them to change their attitudes if they're not paying attention,” stresses Tom Yorton, CEO of Second City Communications.
That's where employee interaction and engagement plays an important role in an effective training program, especially with subjects as complex as financial accounting and reporting. Second City Communications, for example, has Real BizShorts—short, funny videos that incorporate humor into ethics and compliance training. “We created Real BizShorts because we saw a gap in the market,” says Yorton. “As important as these topics were, they weren't being presented in an engaging way, and consequently, companies weren't getting the traction they needed.”
IN-HOUSE TRAINING TIPS
Below, Navistar provides some “considerations in developing an in-house program”:
Obtain executive buy-in and support
Promote a training culture and demonstrate investment in staff
Establish a training requirements policy, including minimum annual hours required and qualifying topics.
Identify target audience and skill levels.
Identify relevant topics. Involve divisional personnel to find topics suited for the audience.
Determine format and alternatives
- Live/instructor led
- Internally-developed webcasts/online courses
- External live conferences
- External Webcasts
- External online courses
Develop content
- Involvement of company subject matter experts
- Alignment with policies
- Pilot sessions
Keep material fresh/current
- Maintain log to address changes for the next update round
Responsiveness to accounting changes
- In-house approach aids in responsiveness to training needs as accounting changes arise
- In-house approach facilitates communication of company-specific application issues around accounting changes.
Overcome multiple language challenges
- Train the trainer
- Selective translation
Program communication and awareness
Program administration
- Dashboards
- Sponsor briefings
- CPE hour tracking and reporting
Cost savings opportunities, such as leveraging the multitude of free webcasts available
Source: Navistar.
While many companies turned to Web-based training long ago, some use the Web's power in new ways, such as building interactive games that engage employees. “Especially as the workforce gets younger and younger and maybe has less experience with some of these tough topics that compliance people deal with, it's really important to present it in a form that people can understand,” Yorton says.
Still, companies can rely too much on Web-based training tools or (worse) printed materials. In addition to interactivity, the company may want to consider bringing in subject-expert speakers to talk about various topics. “There are plenty of people out there who like to come out and talk to companies,” Guy says. “And they tend to do a very good job.”
Guy describes Navistar's training program as a “learning culture.” If an outside training course or conference is relevant to the employee's area of responsibility, “we would promote that,” he says.
Technology can also help track employee engagement. “Most corporate compliance training vendors today provide a learning management solution with their training,” Allen says. The basic functionality of such solutions includes distributing the training to employees, tracking completion, and coordinating reminders to employees to complete the training by a certain date.
How often training happens is also an important factor in making programs effective. Train too little, and employees don't grasp the concepts; train too much or too long, and they become fatigued. “Most training packages are delivered on an annual basis or less,” says Ford. “How effective is that, really?” Training sessions should be repeated at least quarterly and not last more than 30 minutes.
Companies also struggle with the build-or-buy decision. “That comes down to scale and size,” Allen says. “Quite frankly, many companies can't afford to take that leap and develop that technology internally.”
The final component to any training program should be a quiz, but those need to be timed carefully. Providing a quiz right after the training is a bad idea, Ford says: “Anyone can regurgitate what they just learned.”
To gauge the effectiveness of your training program accurately, quiz employees roughly six months after their training to see if they are “still retaining and understanding what their obligations are,” Ford says. “That is the best evidence you can have for saying your training is working.”
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