VideoIn general, though, the basic components of a corporate finance training program — rotating assignments bolstered by mentoring and some type of classroom experience — have changed little since General Electric rolled out its pioneering Financial Management Program in 1919. While companies vary on whom they recruit, how long the rotations are, and how extensive the classroom training is, the basics remain the same across companies as diverse as aluminum giant Alcoa, pharmaceutical producer Abbott Laboratories, and computer-hardware maker EMC.
In fact, when EMC decided to upgrade its program in 2001, it followed the GE model almost exactly. "The opportunity to participate in a training program creates a lot of buzz on campus when we go out to recruit," says EMC treasurer Irina Simmons of the three one-year rotations and two years of classroom training the company is offering to new finance staffers.
Based on requests from current employees, meanwhile, Citigroup is adding a refresher course on accounting to the "boot camp" it puts its MBA recruits through before sending them off on rotating assignments. It is also offering a new course on using balance sheets and income statements to its CFO University, a finance curriculum available to all levels of staff throughout the company.
Ford says its reengineered introductory program will be basically the same as the old one, except that it will put MBAs through a shorter program and keep a closer watch on new undergraduate recruits, rotating them through different finance roles within a single organization. Unlike some of its peers, Ford hasn't put a heavier emphasis on technical skills in response to Sarbanes-Oxley, according to the company's finance recruiting manager, Ashlie Pruett. College recruits "certainly will, at some point in their early careers, have experience with internal controls, but as for having the technical expertise to come in, I don't think we'll require they go back and get a CPA or master's in accountancy," she says.
The company has also stripped out much of the standardized classroom curriculum and large group conferences that it used to require. "We don't have a lot of book learning," says Beer. "You learn on the job." Still, Ford encourages recruits to go on for an MBA with 100 percent tuition reimbursement.
The biggest change at Ford, in fact, is a decision to focus recruiting efforts on undergrads rather than MBAs. "We'll be hiring 60 to 70 percent undergrads this year, whereas we used to hire 60 to 70 percent MBAs," says Pruett. Hiring undergrads is not only cheaper and more appropriate to the available openings, it also gives the company better prospects of diversity, since the proportion of women and minorities in undergrad classes tend to be higher than those in MBA programs. Another compelling reason, according to Pruett: "We can get the best of the best at undergrads, whereas we're competing with investment banks and others at the MBA level."
Job Swapping
Job rotation does have well-known difficulties, including matching employees with appropriate jobs on a regular basis, and getting managers to devote extra attention to their trainees. Such challenges have typically made job rotations difficult to achieve at small and midsize companies, where finance staffs tend to be leaner and positions fewer.
But at least one small-company CFO has found that documenting processes for Section 404 compliance has made it easier to give her staff the variety of experiences that many seek through rotational programs at big companies. "Once these processes become more documented, there's still expertise involved, but it becomes a little bit easier to swap them," says Melissa Cruz, CFO of Concord Communications Inc., a Marlboro, Massachusetts-based software company.
Based on the job catalog that 404 work has produced, along with twice-annual career-planning meetings between staff members and their managers, Cruz promotes lateral swaps among her 20-person finance staff to prevent boredom and build new skills. Recently, that meant the group doing travel-and-entertainment expense reporting traded another group for sales-tax processing, with each group teaching the other in its area of expertise. In another corner of the department, the manager who oversaw order administration cross-trained her group by having them fill in for finance staffers who handled licensing agreements when they went on vacation. That eventually allowed both groups to do both jobs — and boosted the manager's responsibilities.
"It is highly motivating, because it gives them an opportunity to do new things on a regular basis," says Concord vice president of finance Roger Blanchette, who often switches up the operational areas that his three senior financial analysts support. "There's not always a manager position open, but this gives them a way to continue to build their skills."
The swaps do take extra management time — both in the planning and execution — but they are well worth it, according to Concord executives, especially with turnover rates running below 5 percent in the past year. The swaps "improve our bench strength and create natural backups," says Cruz.
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