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Current Editor: Dr. Robert T. Howell  bhowell@fhsu.edu
Volume 32, Number 4
Summer 1995


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Required Business Skills for Training Professionals

James A. Leach
University of Illinois at Urbana-Champaign
Darrel L. Sandall
University of Illinois at Urbana-Champaign

Preparing students for training and development positions in the private sector is not a new endeavor. Almost 15 years ago Roth (1981) noted that the preparation of professional educators for a variety of settings was one of the more rapidly growing areas of interest for schools, colleges, and departments of education. Since that time an increasing number of graduate and undergraduate students in university programs have been preparing for training and development positions in business and industry as well as positions in the public and voluntary sectors. The number of academic programs is increasing yearly. There may be no single, right way to prepare human resource development professionals or even a commonly-agreed upon core of skills and knowledge (Pace, Smith, & Mills, 1991) however, at least some level of business understanding and skill is necessary (McLagan,1989).

Graduates of traditional teacher education programs have considerable difficulty in making the transition into training roles in business and industry (Roth, 1981). Many find that their non-technical education backgrounds do not prepare them adequately for the more specific, programmatic atmosphere of the organizational training world (Blitzer, 1988). The major weakness of teachers, as identified by trainers in a survey conducted by Weischadle (1984), was the lack of business experience and skills. Fifty-one percent of the respondents recognized this as a deficiency that teachers bring to prospective employers. Another twenty-nine percent said it was the second most important shortcoming.

Possessing business knowledge and skill is a very important and relevant aspect of training (Leach, 1993). However, in some cases because of the students' diverse backgrounds, they may not be prepared adequately for work in the business environment. Students usually receive training on topics such as educational methods, adult learning, and instructional design. Much of their preparation focuses on providing education and training in a public school environment, not in the business environment. For the most part, the instructors and the curriculum to which they are exposed are not grounded in the business world and its applications (Leach, 1992), and the students who pursue careers in training and development too often have little prior business experience (Halim, 1993; Zarin, 1994).

Training and development professionals who lack basic business understanding and skills are at a distinct disadvantage. Their lack of understanding of the enterprise context and the complexities associated with the business world prevents them from seeing how and where their work fits into the organization, how and why it is or is not valued, or how to relate their work to the basic business culture of the organization (Leach, 1993).

The American Society for Training and Development (ASTD) supported study, Models for HRD Practice (McLagan, 1989), identified "business understanding" as a core competency required to perform successfully most of the business-related roles associated with an HRD position. Business understanding was defined as "knowing how the functions of a business work and relate to each other and knowing the economic impact of business decisions" (p. 56). However, specific understandings and/or skills were not identified by the study. More needs to be known about just what comprises business understanding and what levels of understanding are expected or required of human resource development professionals.

The purpose of this study was to identify business understandings and competencies required of newly hired training and development professionals and of training managers in business and industry. More specifically, the purpose was to determine which business understandings and competencies should be incorporated into the academic preparation of human resource development professionals.

Method

Human resource development managers, who were assumed to have knowledge of the requirements for both new hire and management level training personnel in their organizations, were selected to participate in this study. The managers were asked to rate the importance of a wide variety of business understandings and competencies for training and development professionals. Results were analyzed and summarized to provide suggestions regarding what business understandings and skills should be included in the academic preparation of training and development professionals.

Sample

The population for this study was defined as human resource development managers who work in business and industrial settings and are members of the American Society for Training and Development. The ASTD membership directory was used to identify individuals with titles such as Training Manager, Vice President of Human Resources, or Training Supervisor. Although titles can be misleading, these persons were selected based on the assumption that they had responsibility for management of training personnel and would be knowledgeable of business skills required of training professionals. The list of human resource development managers was then categorized by the type of business or industry in which they work by using the Standard Industrial Classification (SIC) Manual (1987). The SIC categories define types of businesses in accordance with the composition and structure of the United States economy and cover the entire field of economic activity. The eight SIC categories used for this study include (a) Agriculture/Forestry, (b) Mining, (c) Electrical/Construction, (d) Manufacturing, (e) Retail Services, (f) Service/Transportation, (g) Finance, and (h) Public Administration. Selecting the sample from across eight SIC categories assured better representation of trainers from a wide variety of businesses. From the list of human resource managers, 100 managers employed in businesses from each SIC category were selected randomly to participate in this study.

Instrumentation

The instrument used in this study listed the basic business understandings and competencies identified by the American Assembly of Collegiate Schools of Business (AACSB) as important for students studying business in college and university academic programs (American Assembly of Collegiate Schools of Business, 1993). The instrument is divided into three columns. A list and brief definition of each business understanding and competency to be assessed is provided in column two, in the middle of the questionnaire. Using a four-point Likert-type scale, respondents were asked to indicate in column one of the questionnaire the importance of each understanding and competency for newly hired training and development professionals in their organization. In column three, the respondents were asked to rate the importance of each understanding and competency for training and development managers in their organization. Respondents were asked to rate the importance of each business understanding and competency either as not important (1), somewhat important (2), important (3), or extremely important (4).

Data Collection and Analysis

The instrument was mailed to the sample of human resource development managers during February, 1994, along with a personally addressed cover letter explaining the importance and purpose of the study. Approximately ten to thirty minutes were required to complete the instrument. Participants were first asked to rate the importance of eighteen business understandings and sixteen business competencies for recently hired training personnel and then to rate the importance of the same business understandings and competencies for training and development managers. Participants were then asked to list any other key business understandings and competencies that they felt were particularly important but not listed on the instrument. Respondents were assured that their responses would be confidential and that information would be reported in aggregate form only. Non-respondents were sent a follow-up letter and instrument approximately four weeks following the initial mailing. Of the 800 instruments mailed, 255 usable instruments were returned for analysis. This yielded a return rate of 32%. Return rates for each SIC category were (a) Agriculture/Forestry, 39%; (b) Mining, 29%; (c) Manufacturing, 25 %; (d) Electrical/Construction, 34%; (e) Retail Services, 20%; (f) Finance, 39%; (g) Service/Transportation, 38%; and (h) Public Administration, 31%.

Mean importance ratings and standard deviations for each of the 34 items were computed and recorded. For each item, between groups analysis of variance (ANOVA) was calculated and a t value computed. Further analysis was conducted using Tukey's HSD test with pooled variance to better determine exactly where variances occurred among the eight SIC categories where ANOVAs indicated significantly different ratings for an item. Frequency counts were conducted for additional understandings and competencies listed by respondents in response to the open-ended question.

Results

For a newly hired training professional, the human resource development managers surveyed for this study rated eight of the thirty-four understandings and competencies as either extremely important or important. Twenty-two of the understandings and competencies were rated as either extremely important or important for a training manager. For newly hired trainers, Select, prepare and organize a presentation was rated the most important competency, with Implement and manage change rated most important for training managers. For both groups, the highest rated business understanding was Employee behavior in the work setting. The understanding or competency rated as least important for training managers was Interpret computer program language. For newly hired trainers, understanding Capital investments was rated as the least important understanding or competency. Mean ratings and standard deviations of the perceived importance for each of the understandings and competencies are reported in Table 1. Understandings and competencies are presented in the Table in rank order of importance for newly hired trainers.

Table 1
Importance Ratings for Business Understandings and Competencies for Newly Hired Trainers and Training Managers

Understandings & Competencies Newly Hired
Trainers
Training
Managers
Mean SD Mean SD

Select, prepare and organize a presentation 3.47 .76 3.77 .48
Write business correspondence in appropriate style 3.46 .68 3.77 .44
Use a computer for business applications 3.39** .78 3.50** .69
Employee behavior in work setting 3.35 .72 3.82 .44
Make speeches and presentations 3.32 .84 3.76 .50
Principles of group process 3.29 .76 3.67 .54
Principles of organizational behavior 3.13 .84 3.66 .60
Implement and manage change 3.04 .78 3.91 .35
Use business planning skills 2.77 .80 3.67 .56
Legal environment in which business operates 2.68 .80 3.45 .69
Use management strategies to influence employee behavior 2.63 .91 3.71 .54
Solve business problems using a computer 2.63 .92 2.98 .87
Labor management relations 2.58 .93 3.33 .82
Principles of competition 2.54 .90 3.10 .91
Ways of dividing work 2.52 .86 3.39 .66
Marketing concepts 2.45 .81 3.14 .83
Apply marketing techniques 2.38 .84 3.25 .80
Formulate business problems in quantitative terms 2.38 .86 3.17 .80
Use descriptive statistics 2.29 .86 2.83 .87
Supply and demand concepts 2.23 .91 2.78 .94
Use accounting information for decision making 2.18 .79 3.22 .77
Interpret financial statements 2.14 .76 3.11 .81
Prepare budgets 2.11 .91 3.59 .64
Basic accounting terminology 2.11 .82 2.91 .82
Integrate financial management concepts
into a systems approach to business decision making
2.08 .83 3.24 .82
Implications of economic growth 2.00 .79 2.77 .90
Cost a product 1.99 .85 3.03 .96
Collective bargaining process 1.92 .84 2.63 .94
Principles of fiscal policy 1.99 .72 2.68 .90
Role of government in economic policies 1.85 .85 2.51 .99
Use basic algebra 1.85* .85 2.17* .91
International economics 1.63 .74 2.21 .93
Interpret computer program language 1.63** .76 1.78** .84
Capital investments 1.61 .66 2.52 .96

Note. Means based on 4 point scale (4 = Extremely Important, 3 = Important, 2 = Somewhat Important, 1 = Not Important). Differences between means on each item are significant at p < .01 unless otherwise noted.
*p < .05.
**not significantly different.

Significant differences between the mean importance ratings of business understandings and competencies for new hires and training managers were identified for thirty-one of the thirty-four understandings and competencies (p < .01). Difference in the importance ratings for one additional competency was significant at the p < .05 level. No differences were found between importance ratings for two competencies: Use a computer for business applications and Interpret computer program language.

Tukey's HSD test using pooled variance with a significance level of p < .05 was used to determine whether there were differences in the importance ratings of the understandings and competencies for new hires or for training managers working in businesses across different SIC categories. Differences in importance ratings for new hires across the eight SIC categories were found for four business understandings and competencies: Principles of fiscal policy; Labor management relations; Select, prepare, and organize a presentation; and Make speeches and presentations.

The business understanding, Principles of fiscal policy, was rated significantly more important by respondents from the SIC category Public Administration (M = 2.27, SD = .74) than by respondents from the SIC category Retail Services (M = 1.62, SD = .67). The business understanding, Labor management relations, was rated significantly more important by respondents from the Service/Transportation SIC category (M = 2.97, SD = ..80) than by respondents from the Finance SIC category (M = 2.23, SD = 1.01). The business competency, Select, prepare and organize a presentation, was rated significantly more important by respondents from the Retail Services SIC category (M = 3.95, SD = .22) than by respondents from the SIC categories of Public Administration (M = 3.23, SD = .82), Mining (M = 3.28, SD = .92), and Finance (M = 3.31, SD = .86). The business competency, Make speeches and presentations, was rated significantly more important by respondents from the Retail Services SIC category (M = 3.81, SD = .40) than by respondents from the Public Administration SIC category (M = 3.00, SD = 1.05).

Differences in importance ratings for training managers across the eight SIC categories were found for ten business understandings and competencies: Basic accounting terminology; Capital investments; Collective bargaining process; Ways of dividing work; Integrate financial management concepts into a systems approach to business decision making; Labor management relations; Marketing concepts; Select, prepare, and organize a presentation; Formulate business problems in quantitative terms; and Use descriptive statistics.

The business understanding, Basic accounting terminology, was rated significantly more important by respondents from the SIC category Mining (M = 3.28, SD = .75) than by respondents from the SIC category Finance (M = 2.54, SD = .82). The business understanding, Capital investments, was rated significantly more important by respondents from the SIC category Mining (M = 3.24, SD = .83) than by respondents from the SIC categories Retail Services (M = 2.10, SD = .85), Finance (M = 2.15, SD = .93), Public Administration (M = 2.26, SD = 1.09), and Electrical/Construction (M = 2.53, SD = .93). The business understanding, Collective bargaining process, was rated significantly more important by respondents from the SIC category Service/Transportation (M = 2.95, SD = .90) than by respondents from the SIC categories Retail Services (M = 2.10, SD = .97) and Finance (M = 2.28, SD = 1.02). In addition, the understanding was rated significantly more important by respondents from the SIC category Public Administration (M = 2.97, SD = .84) than by respondents from the SIC categories Retail Services (M = 2.10, SD = .97) and Finance (M = 2.28, SD = 1.02). The ratings by respondents from the SIC category Service/Transportation were not significantly different from those of respondents from the SIC category Public Administration.

The business understanding, Ways of dividing work, was rated significantly more important by respondents from the SIC category Finance (M = 3.54, SD = .55) than by respondents from the SIC category Retail Services (M = 3.00, SD = 1.03). In addition, the understanding was rated significantly more important by respondents from the SIC category Public Administration (M = 3.68, SD = .48) than by respondents from the SIC categories Retail Services (M = 3.00, SD = 1.03) and Agriculture/Forestry (M = 3.15, SD = .63). The ratings by respondents from the SIC category Finance were not significantly different from those of respondents from the SIC category Public Administration. The business understanding, Labor management relations, was rated significantly more important by respondents from the SIC category Service/Transportation (M = 3.63, SD = .63) than by respondents from the SIC category Finance (M = 2.92, SD = .98). In addition, the understanding was rated significantly more important by respondents from the SIC category Public Administration (M = 3.74, SD = .44) than by respondents from the SIC categories Finance (M = 2.92, SD = .98) and Retail Services (M = 3.05, SD = .76). The ratings by respondents from the SIC category Service/Transportation were not significantly different from those of respondents from the SIC category Public Administration. The business understanding, Marketing concepts, was rated significantly more important by respondents from the SIC category Service/Transportation (M = 3.55, SD = .55) than by respondents from the SIC categories Retail Services (M = 2.85, SD = .99), Finance (M = 2.87, SD = .95), and Manufacturing (M = 2.88, SD = .67).

The business competency, Integrate financial management concepts into a systems approach to business decision making, was rated significantly more important by respondents from the SIC category Mining (M = 3.52, SD = .57) than by respondents from the SIC category Retail Services (M = 2.75, SD = 1.07). In addition, the understanding was rated significantly more important by respondents from the SIC category Service/Transportation (M = 3.53, SD = .60) than by respondents from the SIC category Retail Services (M = 2.75, SD = 1.07). The ratings by respondents from the SIC category Mining were not significantly different from those of respondents from the SIC category Service/Transportation. The business competency, Select, prepare and organize a presentation, was rated significantly more important by respondents from the SIC category Finance (M = 3.92, SD = .27) than by respondents from the SIC category Service/Transportation (M = 3.55, SD = .69). The business competency, Formulate business problems in quantitative terms, was rated significantly more important by respondents from the SIC category Mining (M = 3.52, SD = .63) than by respondents from the SIC category Finance (M = 2.85, SD = .87). The business competency, Use descriptive statistics, was rated significantly more important by respondents from the SIC category Public Administration (M = 3.13, SD = .88) than by respondents from the SIC category Retail Services (M = 2.30, SD = .92).

Respondents were also asked to list any other business understandings or competencies they felt are important for training professionals in their organizations; their responses were recorded, analyzed, and grouped with similar responses. The nine additional business understandings and competencies identified by human resource development managers as important for training professionals are listed in Table 2. For the most part, respondents identified the additional business understandings and competencies as equally important for both new hires and training managers. However, the understanding or competency, Customer Interaction Skills, was identified as being important for new hires more than twice as often as for training managers. Conversely, the understanding or competency, Initiating and Managing Change, was identified as being important for training managers almost three times as often as for new hires.

Table 2
Additional Business Understandings and Competencies for Newly Hired Trainers and Training Managers Identified By Human Resource Development Professionals

Understandings & Competencies Number of Respondents
Identifying Item
Newly Hired
Trainers
Management Level
Trainers

Organization Skills/Leadership 22 21
Listening & Conflict Resolution Skills 20 18
Project Team Skills 15 19
Total Quality Management Principles 6 8
Customer Interaction Skills 8 3
Business Integrity Ethics 5 4
Understanding and Adapting to
Business Environment
5 3
Initiating and Managing Change 4 11
Cost/Benefit Analysis 4 4

Conclusions and Implications

Based on the ratings provided by human resource development managers, individuals employed in entry level training positions need to understand or be competent in just a few basic business areas to perform satisfactorily in their jobs. Only eight of the 34 business understandings and competencies were rated by human resource development managers either as important or extremely important for newly hired trainers. These eight business understandings and competencies are easily generalizable to almost any company:

  1. Select, prepare and organize a presentation;
  2. Write business correspondence in appropriate style;
  3. Use a computer for business applications;
  4. Employee behavior in work setting;
  5. Make speeches and presentations;
  6. Principles of group process;
  7. Principles of organizational behavior; and
  8. Implement and manage change.

These eight basic business understandings and competencies could serve as the core business curriculum to be incorporated into the academic preparation of human resource development professionals.

Training managers presumably have more experience, deal with a wider variety of training issues, and train a larger number of managers and executives than individuals employed in entry level training positions. For training managers, the number of business understandings and competencies rated as either important or extremely important increased considerably, to twenty-two. This group of understandings and competencies includes all eight of the basic understandings and competencies identified as important for newly hired trainers and adds such understandings and competencies as Legal environment in which the business operates, Interpret financial statements, and Formulate business problems in quantitative terms. The ratings for almost every understanding and competency were significantly higher for training managers than for newly hired trainers.

These results indicate that as trainers gain experience in their positions with the company, they are expected to continue developing business understandings and competencies. Continued development of business understandings and competencies by training professionals can be accomplished either by participation in formal academic programs offered by colleges and universities and/or involvement in formal and informal training on the job. The business understandings and competencies rated as either important or extremely important for training managers could be included as a major component of advanced academic preparation provided in graduate level academic programs for human resource development professionals.

For the most part, the ratings suggest that there is a core of basic business understandings and competencies required for training and development professionals. However, as would be expected, a few understandings and competencies are more important for certain industries than for others. For example, Select, prepare and organize a presentation was rated significantly higher for newly hired training professionals in the Retail Services industry than for people in Public Administration, Mining, or Financial industries. The same is true for training managers. Capital investments was rated significantly higher for Mining than for Retail Services, Finance, Public Administration, and Electrical/Construction. These subtle differences can be extremely important for maintaining the efficacy and credibility of the academic curriculum for human resource development programs that prepare individuals primarily for companies in specific industries.

This study identified a core group of business understandings and competencies required for newly hired trainers to function effectively in business. This required group of understandings and competencies increases greatly for training managers, and the perceived importance of each understanding and competency is higher for training managers than for newly hired trainers. Graduates of human resource development academic programs need to be competent in the core group of understandings and competencies needed for entry-level positions, and have at least a cursory grasp of several other business understandings and competencies.

Authors

Leach is a Professor of Human Resource Development, Department of Vocational and Technical Education, University of Illinois at Urbana-Champaign, Champaign, Illinois.

Sandall is a graduate student in Human Resource Development, Department of Vocational and Technical Education, University of Illinois at Urbana-Champaign, Champaign, Illinois.

References

American Assembly of Collegiate Schools of Business. (1993). Achieving quality and continuous improvement through self evaluation and peer review: Standards for accreditation for business administration and accounting. St. Louis, MO: Author.

Blitzer, R. (1988). Guiding people into the training profession. Training and Development Journal, 42(12), 65-67

Halim, D. (1993). The need for practical experience in the HRD degree in Pittsburg State University. Unpublished master's thesis, Pittsburg State University, Pittsburg, KS.

How can trainers become better business partners? Training and Development Journal, 42(4), 14-22.

Leach, J. (1992). Private sector instructors: The nature of effective vocational educators working in business and industry. Berkeley, CA: National Center for Research in Vocational Education, University of California at Berkeley.

Leach, J. (1993). Preparing tomorrow's business and industry trainers: Appropriateness of the content of vocational teacher education programs. Journal of Vocational and Technical Education, 9(2), 4-16.

McLagan, P. (1989). Models for HRD practice. Training and Development Journal, 43(9), 49-59.

Pace, R. W., Smith, P. C., & Mills, G. E. (1991). Human resource development: The field. Englewood Cliffs, NJ: Prentice Hall.

Roth, R. (1981). Trainers in business and industry: Implications for colleges of education. Journal of Teacher Education, 32(2), 33-36.

Standard Industrial Classification Manual. (1987). Springfield, VA: Executive Office of the President, Office of Management and Budget.

Weischadle, D. (1984). Teachers make excellent trainers. Performance and Instruction, 23(3), 22-24.

Zarin, S. A. (1994). Evaluation of the M.S. in human resource development program at Pittsburg State University. Unpublished master's thesis, Pittsburg State University, Pittsburg, KS.


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