Training and Development: What's the Difference, Anyway?

The term "training and development" is used to refer to everything an organization does to upgrade the skills and improve the job performance of its employees, in both the short term and the long term. But there are some differences between training and development.

Think of training as tactical, and professional development as strategic. "Training" refers to activities a company offers employees to help them become more proficient at specific tasks that are part of their current job. "Development" involves helping employees function better interpersonally and preparing them for future roles. Both are important, and the degree to which a company uses each will depend on its employees' specific needs.

Some Fortune 100 companies, such as General Electric, spend more than US$1 billion a year on these initiatives, but it's not necessary to dedicate anywhere near that level of resources. There are several specific steps an organization can take—many of which are relatively low-cost—to enhance training and development efforts. In the end, any program can be successful if it satisfies two requirements:

• employees make significant improvements in their knowledge level and work product as a result, and
• in the process, employees recognize and appreciate the fact that their company is supportive of their ongoing professional growth.

A Step-by-Step Guide

Here are some ways to provide effective training and development to your employees:

Talk about career paths.  For employees to feel comfortable about, and motivated to take advantage of, training and development offerings, they need to know that their company truly supports and values these initiatives. Managers can convey this message during career-path discussions with their direct reports.

Individuals and their managers should sit down to review together the employee's professional goals and discuss the skills, experience, and training needed to achieve them. It may be impossible to promise individuals exactly what the future will hold for them in the organization, but managers can work with them to develop career maps, through which staff members can set realistic expectations about their advancement opportunities.

An individual development plan (IDP) can be a useful tool in this process. An IDP is a document that outlines an employee's professional goals, as well as the steps the person must take to reach them. It allows management to consistently review, update, and discuss an employee's developmental goals. When someone is ready for the next level but no position is available, an IDP can be used to identify growth opportunities within the existing position so that the worker remains challenged and motivated.

Straighten the path to attaining certifications and degrees.  Businesses need to go beyond just giving verbal support to employees' desire to pursue certifications or additional degrees. Managers should put their money where their mouth is.

Earning and maintaining a professional designation is one of the best ways for employees to update their skills and bring new learning to their organization, so it also provides a clear benefit to employers. But the typical day-to-day workloads within the finance function mean that treasury and finance professionals often find it difficult to make time to advance their knowledge. Moreover, some staff may lack the motivation to pursue additional certifications or degrees if their employer doesn't clearly value those efforts.

A company can demonstrate support for employees who are continuing their professional education by allowing flexible work options that help them balance work with their educational pursuits. It can also help defray employees' education costs by paying for some portion of the expenses associated with pursuing and maintaining credentials or degrees. This may include covering membership fees for professional organizations that offer networking and learning opportunities. Businesses should also consider increasing the compensation of employees who have upgraded their skills through additional certifications or degrees.

Help staff identify and pursue CPE opportunities.  In addition to helping cover some of the costs of training and development, a company can work with employees to identify opportunities to rack up continuing professional education (CPE) credits. Treasury and finance leaders should point their team toward industry associations, online courses, and webinars offering CPE credits. Then they should allow employees, as much as possible, to take time out of their workday to earn CPE credits, whether through online meetings or in-person events.

Provide in-house training.  In-house training doesn't have to be an elaborate undertaking to be worthwhile. Often, an experienced staff member can lead training on important topics such as the nuances of new regulations or the capabilities of the company's finance systems. Managers might also consider inviting business and finance leaders from outside the organization to present information or fresh insights and ideas to the team. In addition, e-learning can be an easily accessible and cost-effective option for getting up to speed on important topics.

Build a mentoring program.  Mentoring is one of the most valuable—and low-cost—means of training and developing employees. Mentoring enables an organization to leverage resources it already has: current employees who have distinguished themselves through outstanding job performance and can serve as role models and mentors.

Mentoring efforts recognize that some skills, such as interpersonal skills, are not easily taught through traditional channels. Rather, mentoring is ideal for the tacit transfer of knowledge, skills, and capabilities. Employees who are paired with an appropriate mentor can develop hard-to-teach abilities, such as diplomacy, persuasive communication, and consensus building.

As firms experience leadership changes due to the retirement of baby boomer employees, mentoring arrangements may become even more valuable as a means of passing on critical organizational knowledge to less-seasoned workers and preparing them to take on positions of greater responsibility.

Create a library.  Stock an unused office or a corner of the conference room with books on leadership, industry and business publications, access to self-administered courses, and certification exam study guides. In the process, you'll also establish a quiet place where individuals can conduct research and review the latest news and trends.

Offer cross-training.  Let employees build their skills in different areas of the finance and accounting function. For example, a treasury professional might benefit from spending time with the group that compiles the quarterly financial statements. Even if cross-training or rotational opportunities are brief, they offer employees exposure to what it's like to work in another area, which helps round out their knowledge and makes them more effective in their day-to-day roles.

Identify and develop potential leaders.  Leadership development is a natural subset of career development. Potential leaders can be anywhere in your company. They may be staff-level employees or current managers. What they will have in common is a desire to build new skills and advance their careers. Employers should also be alert to "diamonds in the rough," employees who may have leadership potential but don't yet have the confidence to step forward and seek additional responsibility.

Make sure all employees are aware of leadership development opportunities, and encourage (but don't pressure) team members to build their skills in this area. Give those who have an interest in leadership roles the chance to participate in leadership development initiatives, which can also help you identify succession candidates.

Keep in mind that leaders can be nurtured and developed, but not manufactured. A good leadership development program will put participants into situations that require them to learn and grow—for example, giving future management candidates the opportunity to "shadow" managers, or even fill in for managers who are away. Formal learning opportunities through MBA programs, executive education, and online courses are other options for employees wanting to build their leadership capabilities.

Measure success.  Finally, most organizations will want to try to gain some assurance that their training and development activities are worthwhile. It's generally acknowledged that one of the primary benefits of employee training and development initiatives is that they enhance morale and confidence on the job, but those outcomes are difficult to quantify.

One of the best ways to measure training success, in particular, is to use assessment and validation tools. That's because training initiatives are generally more measurable than development activities, since training usually involves discrete, closed-end learning activities, while development efforts tend to be ongoing.

The most common way to gather feedback from training participants is to distribute surveys to them at the conclusion of, or soon after, a session. Be aware, though, that post-training surveys measure initial reactions and often offer little insight into the long-term value of the training. For this reason, it's important to observe the accomplishments or behavior of employees in the weeks and months after training, or to follow up with the individuals' supervisors for their assessment.

Another useful measure can be attrition rates. As a general rule, employees who feel that they are learning and growing in their current roles are less likely to seek out new opportunities. You can track your attrition rates to see if this holds true at your company.

Training and Development: An Antidote to Recruiting Challenges

So, what's the bottom line? Again, more and more companies are realizing that they can no longer solve performance problems simply by getting rid of employees who aren't measuring up and replacing them with candidates who appear to be better equipped for the job. Not only is recruiting suitable candidates expensive and disruptive to the business, but professionals with specialized skills in finance are hard to find today.

Simply put, the "shape up or ship out" approach to management is no longer feasible in most businesses, even for entry-level positions. In response to this workforce reality, more and more companies are investing time and money in training and development initiatives.

Although many aspects of training and development require companies to dedicate time and money to the initiative, smart organizations see efforts to elevate their employees' skills not as an expense, but as an investment. It's an investment in the company's ability to attract and retain top performers—which is to say, it's an investment in the company's ability to remain competitive and able to meet the challenges of today's global business environment.

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DeLynn Senna, CPA, is the executive director of Robert Half Finance & Accounting, the world's first and largest specialized financial recruitment service. In her role, she leads Robert Half Finance & Accounting's global operations, including defining brand positioning and working with executive and field leadership across five continents to develop growth strategies and operating processes, and to shape and promote the company's vision internally and externally.