Term Paper on "Training and Development"

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Training and Development

Case Summary

Arthur C. Kaplan is one of the first six largest accounting companies in this industry and its activity is expanded at international level. The company hires almost 20,000 employees and its clients come from 31 nations, ranging from small companies to Fortune 500.

The current market trends are very optimistic. In the next 5 years, a.C. Kaplan is planning to expand its activity by a lot and in terms of human resources it seems that the company will need 900 new managers and 200 new partners. This is going to be very challenging because the company's policy is focused on promoting employees from within, rather than bringing them from outside and the average time span for a young professional to get to the partner position is 10 years.

Auditing and accountability are very demanding for employees that most of the times work 60-70 hours per week, whereas the salaries are in the mid-$20,000 a.C. Kaplan's benefit package is average for a company of its size, which is why many of the entry level employees leave the company after a short while without getting to the manager of partner level.

The company emphasizes the role of training and development. This is one of the reasons that led the management to build top in-house training and development centers. The most important of them is the Corporate Education and Development Center (CEDC) in Rye, NY. Every new Kaplan employee receives a two-week training in this center before starting a three-month on-the-job training in one of the corporate offices. The entry level training is focused on providing the employee with knowledge abo

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ut processes and systems needed to perform its task, without trying to sharpen its interpersonal skills. However, lately it has been suggested that these latter skills should be trained as well, but many senior partners consider that the company is already spending too much money on training and development and in the end many of the employees that benefit from this program are leaving anyway. Given the new conditions of expanding workforce, the CEDC program represents a great challenge for the multinational company.

Problem Identification

The CEDC is seen by many managers as a high financial burden, but in the same time the center is envied by many of the company's competitors as a.C. Kaplan's new employees are supposed to be better prepared than the average new employees in this industry. The center is training the beginners and developing their skills for those to perform their tasks better in increase the company's overall performance. However, given that the company is expecting increasing waves of new employees, this will require even more financial resources and because the expansion is done at international level, the financial resources are expected to grow exponentially.

Anthony Blaine, one of the training directors questioned the CEDC stating the following: "For years we've been throwing tons of training at these people, but we aren't sure if it's the right kind, if it's too much, or even if they're catching what we're throwing!." This suggests that even though the company has made large efforts for the center, especially financial, to some extent, its efficiency and efficacy it's still unknown for the management.

A.C. Kaplan is spending in average $1,200 per year per employee in training activities and quite a large part of the new employees are leaving the company before getting to the manager of partner level, which translates into high attrition rate. The company needs a better strategy to retain its personnel, because every employee that leaves the company implies that one new has to be brought in and trained. This involves a financial effort and a time span in which the new employee gets accustomed to all processes, systems and dealing with clients.

A.C. Kaplan has maintained a policy of promoting people from within the company, but the time span of reaching the partner level is in average 10 years. Given the increasing growth rates in the accounting/audit industry, the company forecasted a necessity of 900 new managers and 200 new partners in the 5 years to come. Taking under consideration high attrition rate and maintaining the 10-year average time span condition to reach partner position, the company will be hindered from reaching the above mentioned objectives with respect to managers and partners, as the company is not capable to retain many of the entry level employees long enough for those to reach top positions.

The CEDC is not focused on the new employees' interpersonal skills. It has been observed that some clients had discontinued business with a.C. Kaplan and in a lot more situation, the aggressiveness of fresh employees has come across a good relationship with some of the clients coming mainly from health care and real estate industries. It is likely that entry-level employees lack interpersonal acumen, given that most of them don't have a prior work experience, and these skills are usually acquired in time. Professional in-door training focused on developing those skills would help the new employees acquire the needed skills a lot faster, but the management is thinking that the company's is already allocation too many resources to the CEDC program. Introducing the new feature in the actual condition, would imply allocating even more resources to the training and development program, which is why major restructuring is needed.

Discussion of Alternatives

The CEDC is seen by many managers as a high financial burden

Set training sessions in the office buildings, instead of organizing those in special centers.

The advantages of this alternative are:

reduced rent-related costs - a.C. Kaplan doesn't have to pay rent for a special place dedicated to training only, such as the Rye center.

A the new employees have the opportunity to watch how the auditing/accounting activity takes place in reality, by being trained in the same office building where they will work after the training period is over.

The disadvantages of this alternative are:

Office buildings training rooms are smaller than CEDC like training rooms, which means that new employee interaction is reduced. The entrants will be divided into smaller groups to fit the new conditions.

The office buildings may get too crowded in some circumstances, as training rooms are also used as conference or meeting places.

The office buildings may loose some of the professional aspect with so many untrained employees around, in case clients pay visits to their accountants/auditors when training sessions are organized.

Reduce CEDC's costs would be to set virtual environment classes taught by remote managers. Also, some of the classes should be taped and used over and over again.

The advantages of this alternative are:

Fewer managers have to rotate at once to provide training for the new employees, as virtual classrooms are larger than physical ones and some of the classes can be recorded, which means that these classes are held only once with the recording occasion.

Virtual classrooms avoid the potential crowd effect that would show up if training is provided in the office building's conference rooms.

The disadvantages of this alternative are:

Virtual classrooms reduce the personal touch of face-to-face training sessions. People interact better when facing each other. Having to communicate through a microphone may be inhibiting for those new employees that are not so familiar to the new technologies.

Also, because some of the new employees are not very familiar to new technologies, the effect of the training sessions for them would be reduced than for all other attendees.

Virtual classroom training sessions reduces the interaction between attendees because everybody has to wait for its turn when talking and the online discussions may go to different directions than face-to-face ones.

Relocate the training and development centers to cheaper locations.

The advantages of this alternative are:

Lower rents paid for training and development centers.

Potential government support, if the new location is in an emerging country and the a.C. Kaplan commits to hire a part of the new employees from the host country.

The disadvantages of this alternative are:

large initial investment is required to relocate the old training and development facilities.

Not all the trainees may be available to relocate, which implies that only some of the company's managers will rotate for this activity and that would create an uneven distribution of training activity among managers, which could lead to employee frustration.

To some extent, CEDC's efficiency and efficacy is unknown to the management

The impact of the training and development programs needs to be measured to determine its efficiency. The company has to set measurable indicators for this activity.

The advantages of this alternative are:

The company has a clear picture of the impact of the training and development activities.

The company can determine which activities are more efficient and which are less efficient and based on that it can choose to expand or eliminate some activities to improve overall efficiency.

The disadvantages of this alternative are:

The company has to allocate new resources for the analysis activity - hire business analysts, provide those… READ MORE

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Quoted Instructions for "Training and Development" Assignment:

“

Below is a case that I would like a written case analysis completed for in order to provide me with a research source. This should be all single spaced and in case study format.

ARTHUR C. KAPLAN AND COMPANY

A Case Involving Talent Acquisition and Development

BACKGROUND:

Arthur C. Kaplan and Company, one of the major *****Big Six***** accounting firms, is an international organization that provides accounting, auditing, and tax services in addition to developing management information systems and conducting a broad range of business consulting activities. Their client list numbers in the tens of thousands and ranges from small businesses to Fortune 500 companies. Kaplan*****s contracts include industrial organizations, financial and educational institutions, government, hospitals and religious organizations as well. The firm has offices in 52 U.S. cities and covers 31 nations. World headquarters are in London, with U.S. headquarters in New York City. The company employs almost 20,000 people, the vast majority of whom are young aggressive C.P.A.*****s.

In light of the tremendous growth of the consulting industry, A.C. Kaplan has ambitious plans for expanding the firm. It is estimated that in the next five years alone they will need 900 new managers and about 200 new partners. Because A.C. Kaplan maintains a policy of promotion from within, these people will come mainly from the ranks of entry-level accountants. There is plenty of incentive for these young professionals to do well; starting salaries for partners average $125,000 (although normally no one reaches partner status until he or she has been with the firm for 10 years).

TRAINING AND DEVELOPMENT:

Given the critical importance of professional talent in the highly labor-intensive consulting business, A.C. Kaplan has devoted millions of dollars over the years to create in-house educational and training facilities that are the envy of the industry. The most observable indicator of this dedication is the very plush Corporate Education and Development Center (C.E.D.C.) in Rye, New York, 30 minutes north of New York City. The 27-acre center provides living and meeting accommodations for approximately 500 persons and includes an impressive facility of classrooms, conference rooms, libraries, and even a television studio. The center also employs a staff of nearly 50 instructors, mostly field managers who rotate on a two-year basis into the C.E.D.C..

Every new Kaplan employee spends two weeks at C.E.D.C. before receiving a total of three additional months of training at one of nine other regional facilities in either Atlanta, Boston, Cleveland, Chicago, Dallas, Denver, Los Angeles, Portland, or St. Louis. All told, A.C. Kaplan and Company spends almost $1,200 per employee for training and education each year.

The majority of this investment is on technical and procedural training for entry-level accountants (e.g., accounting and finance, auditing, tax, business writing, time management). Additionally, employees receive extensive training in the specific industries where they will predominantly work (e.g., oil and gas, manufacturing, banking, health care). The senior staff is particularly aware that A.C. Kaplan*****s public image is largely a function of the actions and work quality of their first-level associates. They clearly recognize the importance of an expert work force and try to spare no expense in this regard.

EMPLOYEE PERFORMANCE:

While A.C. Kaplan affords many opportunities to their employees and spends a great deal of money on professional development, they in turn expect a great deal from their employees. Especially in the first two years, it is not at all uncommon for a beginning C.P.A. to work 60-70 hours per week. The schedules and traveling are often grueling, and the rewards in the first few years are typically not commensurate. For example, salaries are generally in the mid-$20,000*****s and the benefit package is only average for a firm of A.C. Kaplan*****s size and revenue base. The greater payoffs, as indicated before, come when one achieves partner status, but not much earlier.

Nevertheless, A.C. Kaplan has little trouble attracting aggressive energetic students generally right out of college who are eager to *****pay their dues***** for corporate success in a major firm. Occasionally, however, this aggressiveness has come across as being boorish and callous with clients, especially in the health care and real estate industries. There are even situations where clients have discontinued business with Kaplan not because of their level of expertise, but because of the *****fast-in, fast out style of big-time consulting.***** While in most cases, Kaplan employees gradually learn to interpret the subtleties of client needs, occasionally (and increasingly), employees have been let go due to their lack of interpersonal acumen.

In view of the importance of interpersonal competence at Kaplan, some of the training staff have suggested that more attention should be placed on interpersonal development of entering employees. But others on staff point out that only two years ago a series of lectures was put into the training program dealing with client and customer relations. The consensus has been that program addition had not been well received. They simply do not feel the added expense would be justified. In fact, there is a growing group of senior partners who believe too much is already being spent on education and training, since so many of those trained employees subsequently leave to take jobs with other companies.

THE TRAINING AND DEVELOPMENT DILEMMA:

Not surprisingly, there is an increasing debate regarding the role and importance of education and training at A.C. Kaplan and Company. It is difficult to know which parts of the current programs are good and which are not. Likewise, it is a problem determining if additional training is needed. As Anthony Blaine, one of the training directors summarized it: *****For years we*****ve been throwing tons of training at these people, but we aren*****t sure if it*****s the right kind, if it*****s too much, or even if they*****re catching what we*****re throwing! We*****ve got to start coming up with some good questions, and then figure out some pretty intelligent answers.*****

Below is how I would like you to outline this case analysis and the # of pages alloted to each area:

1. Case Summary (1 page)

a. Write a brief summary of the case

2. Problem Identification (2 pages)

a. Cite and describe 5 problems in statement form.

b. Use bullets for each problem.

3. Discussion of Alternatives (8 pages)

a. Restate each problem first (copy and paste from problem identification areas)

b. Discuss 3 alternatives/solutions for each problem.

c. Discuss a continuum beginning with the *****status quo*****, i.e., doing nothing to some *****extreme*****.

d. Bullet and discuss 2-3 advantages and disadvantages for each alternative.

4. Solutions/Decisions (3 pages)

a. Restate each problem (copy and paste from problem identification areas).

b. Select the *****best alternative***** for each of the five problems and restate the alternative.

c. Write a paragraph in narrative form and state why the alternative for each problem was chosen as the best.

5. Implementation Plan (1)

a. List 2 action statements per solution (10 total, 2 action statements to solve each of the five problems), and place in priority and chronological order.

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