The Internal Revenue Service recently announced that it intends to develop a testing program for tax preparers. While CPAs and enrolled agents (non-attorneys who may represent clients before the IRS) have had testing and licensure programs for a number of years, the estimated 900,000 to 1.2 million individuals who prepare tax returns for a fee can do so without any sort of credential. The logic behind this new IRS initiative is to protect the public from incompetent or unscrupulous practitioners. Apparently, this move is supported by some of the large tax preparations firms who view this as a way to force ill-prepared practitioners out of the field.

There are some who argue that licensure programs should not exist because they represent a restraint of trade and that the market should be the sole determinant of who can offer professional services. Indeed, there may be situations where the development of a licensure program may be a bit misguided. (For example, there is a battle in Virginia over the licensure of yoga schools.) That being said, tax preparation very much seems a situation where some form of regulation seems reasonable to protect the public. Similarly, until the recent mortgage crisis, many states did not have a licensure program for mortgage brokers. To that end, pan was pleased to assist the Indiana Secretary of State in implementing a testing program for loan brokerage professionals.

Reid Klion

While yesterday's post looked at where the jobs are anticipated to be in the coming decade, it is also helpful to see what happened over the past 10 years in terms of employment. Overall, the picture was not rosy. Indeed, the past decade saw no net job creation. In a similar vein, many households are making less money now (when adjusted for inflation) than they were 10 years ago. While the pain this has created is real, it also should be noted that some of this is due to measurement issues as the late 1990s were times marked by economic growth largely fueled by an investment bubble that subsequently burst while we are currently working through some economic issues that haven’t been seen since prior to the Second World War. As a result, the past decade is bracketed between a high point and what is an historic low.

All that being said, one can only hope that the early signs of improvement in the job picture continue to emerge. Additionally, the trend toward workers returning to school for additional training as well as the emergence of specialized training programs can only lead toward increasing the overall value of the pool of human capital that is available.

Reid Klion

Best wishes for 2010! The past several days have been an opportunity for many to take some time from work and enjoy family and friends. The end of the year (and, in this case, what is arguably the end of a decade), is also a time for reflection and anticipation.

In turning attention to human capital and workforce development, one topic to consider is where job growth will be in the coming decade. According to the Bureau of Labor Statistics, the high growth positions will be in professional/business services, health care, and service industries while manufacturing will continue to dwindle. The positions with the highest growth potential are seen to be in the management, scientific, and technical consulting services while the greatest anticipated losses are expected to be in textile and apparel manufacturing. Here is a nice graphic representing the BLS data.

While unemployment still hovers around 10%, there are some recent signs of improvement. However, there are concerns that much of the job growth is in lower skilled positions, especially in home health care, customer service, and food preparation as well as the realization that the days of well-paid factory work largely may be a thing of the past. Interestingly, the best-paying positions in which there is substantial growth but require limited training is long-haul truck driving.

Reid Klion

A recent article by Filip Lievens, Deniz Ones, and Stephan Dilchert looked at the relationship between personality and medial school success. This  follows the path of other researchers who are looking at non-cognitive factors in predicting academic outcomes.

They followed 600 Belgian medical students longitudinally throughout their academic careers. (Differing from the US model where medical school is essentially a 4-year graduate program, European students typically enter medical school directly from high school in what is a 7-year program.) They found that personality differentially predicted medical school outcome based upon the changing demands of medical school. (Especially in the European model, the first few years are comprised almost exclusively of basic science while latter years have an increased focus on clinical work and patient contact.) For example, openness and extraversion had increased validity in predicting performance over the 7-year period. Similarly, they found that while conscientiousness predicted grades throughout a medical student’s career, its validity increased from .18 to .45.

These specific findings aside, the article also is a good reminder that it can be important to study the validity of a predictor over time, especially in situations where task demands are dynamic and change predictably over time.

Reid Klion

There is an old saying that an economic downturn turns into a depression as soon as you lose your job. With the current unemployment rate now at 10% (and down a bit from October’s high of 10.2%), there are substantial numbers of people who are  unable to find work. A recent New York Times/CBS News poll documents some of the common issues faced by the unemployed ranging from the obvious financial hardships to mental health issues and family conflict. Consistent with other reports, a healthy number are considering job re-training or a return to school.

In terms of the future, Paul Krugman, a Nobel Prize winner for economics, is concerned that job creation efforts have not gone far enough.  (He also makes tthe interesting point out that the economy needs to add over 100,000 jobs a month simply to keep up with population growth.) While he believes that the government did the right thing in stabilizing the banks last year, efforts have not been sufficient on the job front. However, rather than viewing the cup as half-empty, others see some positive news on the horizon. For example, unemployment claims are edging downward, there are increases in productivity, and seasonal hiring is at its highest level since 2004. Regardless, it is clear that the current economic situation has created substantial difficulty for millions (as well as for the business who want to thrive). We can only hope that these early signs of improvement are a signal of things to come.

Reid Klion

The Indian Institutes of Management decided to move the Common Admission Test (required for admission to Indian MBA programs and similar to the GMAT in North America) to a computer-based test delivery model available over a ten day period. (In previous years, the test was administered in paper/pencil format on only one day.) This year, nearly 200,000 candidates applied to take the exam. Unfortunately, due to a number of factors including widespread hardware issues and a Cornflicker virus infection, there were major problems in delivering the test. A number of testing centers had to be shut down with reports indicating that some 10%-18% of candidates had to be re-scheduled (though it appears all who were not successful in doing so). Given the scale of the program, it has garnered substantial coverage in the press as well as in the Indian Parliament and brought forth public interest from number of other test delivery organizations that manage large-scale test delivery projects in India and would like to take on the project next year.

Reid Klion

In the past, I have blogged about testing in China and Korea.  While we often thinking of standardized testing as a Western phenomenon, it really has its roots over 2000 years ago in the Chinese imperial exam system with the concept later being adopted in the East in the 19th century.

The scale of some of these Asian programs is quite impressive (as well as is the potential for high profile problems which I will blog about tomorrow in regard to recent issues in India with delivery of their equivalent of the GMAT). At the end last month, nearly a million candidates took the Chinese Civil Service Examination. Attributed to the economic slowdown, the number of test takers (photos) has increased by a factor of 15 since 2003. Given there are only 15,000 openings for a million test takers, the stakes are impressively high. These government positions are often coveted for their stability and are sometimes referred to as the "Iron Rice Bowl."

Reid Klion

I read an interesting article the other day on the psychological challenges faced by financial professionals in light of the investment market plummet of the past year. Written by a gentleman originally trained as a clinical psychologist who has spent the past 25 years as an investment advisor, he outlines a number of stressors and dynamics facing this group of professionals.

• Loss of faith in the fundamental investment  theories that underlie the models followed by investment professionals which completely failed to predict potential losses of this speed and magnitude.
• Subsequent revelations about the investment industry have also proven unsettling, leaving professionals to doubt the credibility of their own organization.
• Guilt and helplessness about the losses faced by clients
•  Personal losses in investments and retirement plans (with the latter often being in parent company stock).
• Concerns about the future in a profession and industry that suddenly became wholly unpredictable.

Given it is written for an audience of clinical psychologists, the article becomes a bit technical in spots. However, it provides a rather unique perspective on some issues that I honestly had not given much thought and is worth a look if it captures your interest.

Reid Klion

pan recently developed a strategic partnership relationship with Global Psychometrics Services (GPS). Headed by Reed Castle, Ph.D., GPS is a recognized leader in the development of high quality testing programs for certification and licensure organizations. By combining pan’s network of more than 800 proctored testing centers with GPS’s experience in test program development, our partnership can now provide a full-service certification solution ranging from job analysis studies and test content creation to proctored test delivery. More information can be found here.

Reid Klion

It sometimes concerns me when I read an article in the mainstream press and have to check if haven’t accidentally ended up on The Onion. I had one of those experiences the other day when I came across an article about how parents in New York City are paying up to $1000 to have their 3- and 4-year-olds  coached on how to take the tests used to qualify students for gifted and talented kindergarten public school programs. Apparently motivated by the desire to avoid the cost of private schooling, these parents describe themselves as seeking the opportunity “to have a choice.” While I admit to not fully understanding all the dynamics around raising a child in Manhattan, I find the whole thing rather ridiculous and resonate to a recent piece in Time about over-involved parents.  

At the other end of the spectrum in terms of over-parenting, I was intrigued by a high school graduation coaching program in the Indianapolis Public Schools. Unfortunately, not unlike many large urban school districts, IPS struggles with high school graduation rates under 50% and students and families who often face a myriad of challenges outside the classroom. Financed by the local Chamber of Commerce, the intent of the program is to help students to complete high school.  Here, it is good to see the business community lend a hand where resources of this type are scarce. In the long run, it is hard to see how a program like this won't benefit all involved--students, their families, and the community at large.

Reid Klion