Does Training Pay for Itself?

Source: Accounting Today

According to experts, training hours create more ability to serve clients by a factor of five. In other words, for every hour of training, an accountant can develop the ability to provide five hours of additional chargeable time. Since the average accountant does not charge nearly all his or her time, the training time is virtually without cost.  Here is  a model for evaluating the benefits of training:

Assume a firm conducts 50 one-hour training classes attended by 25 people. According to the statement above, that produces a total of 250 hours of potential additional chargeable time per person. If the average billing rate is $110, that’s a total of $27,500 per person per year, or $ 687,500 for the firm. If the cost of training is $40 per hour, the total cost is $2,000 per person, $50,000 for the firm. The net potential increase in revenue is $637,500. If the firm’s revenue were $6,000,000, the additional hours would represent a potential 11 percent increase, all to the bottom line.

For the complete article, see Accounting Today, March 2005, “The Economics of a Training and Learning Culture,” which can be found at http://www.webcpa.com/article.cfm?articleid=11168&;pg=acctoday.