It is the responsibility of any responsible employer to hire good people and then equip them with training, education and resources so they can be successful in their role. This talent development process spans many industries and types of companies.
Often during this process, the talent development process requires a professional to be competent within a role or job function. Indeed, this competency development and assessment is often undertaken to raise the credibility of the professional who is delivering a product or service.
A good, safe, non-controversial answer is probably, “it depends.” But I don’t think “it depends.” I think it is always better to first look outside the organization when setting a competency standard for employee-professionals.
Let’s say you are head of advisor services for a financial services firm with thousands of professional advisors. One of your many challenges is showing current and potential clients that Advisor A is competent in delivering investment management services to individual or institutional clients (like 401(k) plans, non-profit foundations, etc.); Advisor B serves general financial planning clients; Advisor C is competent in complex issues faced by wealthier clients; and Advisor D delivers retirement planning services.
Your initial response when faced with this challenge is to pull in your chief talent development officer (CTDO), then ask them to propose a budget and plan that funds the development and delivery of training and education, which assesses competency of the professionals.
Maybe the CTDO is a smart cookie. Perhaps they are even a Certified Professional in Learning and Performance® (a credential administered by the Association for Talent Development). So they decide to first look outside the organization to see if there are legitimate, rigorous, industry-wide standards for all of the financial advisor jobs listed above.
Indeed, there are many; but here are just a few:
After learning all he or she can about these designations, the talent development officer comes back to the company executive with a recommendation. But surprisingly and amazingly, the company still decides to build the standards internally.
1) Control – The group or executive being asked to look into developing competencies for employees is often also in charge of training and development, and want to exert their own value and the value of the teams or experts that work for them. There is the old adage, “when all you have is a hammer, every problem looks like a nail.”
2) Faux credibility – Companies like to market internal designations to unsuspecting customers as certifications, and these customers generally have no clue about how to assess the validity of a certification (or lack thereof) – see my blog post, “Does your Credential Pass the SMEL Test?” It is in the business interest of the company to keep the bar low, so they set the competency criteria so that nearly everyone “gets in”.
3) Take it and then leave it – Rather than being given reimbursement or incentives to earn an outside credential, employees are often required to complete the internal training, earn the internal designation, and if they ever leave their firm to go elsewhere, the internal designation stays with the firm who minted it. Firms see this as a type of “golden handcuffs,” but when legitimate alternatives exist for professionals, this is actually quite a deterrent to employee retention.
4) Father knows best – at heart there is a cognitive “invented here” bias within all of us. And firms do often believe strongly that they are the best source of knowledge around a process, product type, or service model. But when it comes to job competencies, its best to let the industry standards bodies do what they do best.
1) Experience and legitimacy. Third-party certification bodies have spent years developing, refining and improving an objective body of knowledge. This process is extensive and evolves over time—it is not conceived in the office of chief talent development officer or the firm’s favorite subject matter expert or product development unit. See my post, “Evolving a Professional Body of Knowledge.”
The industry job analysis drives all of the standards required for certification of a professional. It defines the experience, education, ethics, and examination requirements, the exam blueprint.
The examination blueprint – indeed the examination itself--is usually administered by a psychometric testing partner. Psychometrics is a fusion-dish of psychology and statistics. The field is concerned with the objective measurement of skills and knowledge, abilities, attitudes, personality traits, and educational achievement. Some psychometric researchers focus on the construction and validation of assessment instruments such as questionnaires, tests, raters' judgments, and personality tests.
Legitimate certification bodies are accredited by NCCA or ANSI/IEC/ISO 17024, or meet the best practices promulgated by these standards. By doing so, they have demonstrated that they can consistently qualify professionals in a field or job using a legally-defensible process. This provides even greater protection to the employer, the professional, the customer, and the industry.
2018 research from the Investments & Wealth Institute with the consumer research firm AbsoluteEngagement.com, using more than 1,000 responses from clients of financial advisors, reveals attitudes about advisor expectations and professional certifications. Investors surveyed say it’s important or critical that advisors:
2) Internal-designations and training programs create greater risk on a variety of fronts to companies who use them. When a professional holds themselves out as having competency in a job or skill that is delivered by the company that employs the professional, both the employer and the professional accept a certain amount of responsibility for the claim. As a result, employer-developed Internal designations represent a greater liability risk to the firm. Fair or not, there is a perception by the public, regulators, and the media that employer-developed, internal designations require less rigor because they are internal instruments. As a result, they fall under greater scrutiny if there is ever a client complaint or regulatory issue caused by a certified professional’s actions. The reputational loss and lost credibility can be a blemish on a company that prides itself on strong training and development.
When a third-party, objective certifier takes responsibility for the assessment of competency, this creates less liability for the firm. A certifying body’s ability to set, administer, and enforce ongoing ethics and competency standards for professionals bolsters the firm’s compliance efforts, by managing the risk and liability associated with incompetent or unethical advisors. These ongoing ethical standards are administered by a professional review board of their peers, using fair, transparent, and objective standards developed over 30 years by advisors, for advisors.
3) Third-party credentials may cost more in the short term, but they end up saving the firm money, reducing liability, and generating more ROI.
There is no question that consumers have become much more sophisticated in recent years, and this includes their education about the quality of designations. As a result, the business development and client service value of internal designations has declined in recent years.
Acquisition and retention of professionals who work in any of the knowledge management fields is higher when their employers are willing to invest in their knowledge. Over time, there are numerous studies that have shown the return on this investment.
Enhancing the professionalism of your employees through third-party certification results in a direct impact on the business. Enhancing the knowledge and skills of employees has a direct, positive impact on customer service, retention, referrals of new customers, customer “share of wallet,” team development, and employee confidence and satisfaction.
Companies often do a terrific job on line level training and development, but when it comes to denoting competency, leave that to those of us who are in the business of developing, establishing, and enforcing voluntary standards for professionals.