Making the connection: investment in human capital can pay major returns.

• Author: Monterio, Brad

The largest scale regulatory overhaul in this century; record unemployment that exceeds 15 million people; economic recession like we've never seen before: federal and state budgets that are out of control: political changeover' and its unknown impact on policy agendas. There is a lot to be busy and worried about today. And it doesn't end there. There are lots of issues that have the potential to distract us from our priorities and real business at hand as business owners and executives and CPA firms are not immune.

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Attention is often paid to rebuilding the value of a business and not enough about investing in people. We're busy trying to maintain revenues, lessen the impact of declining revenues, cut costs and manage the bottom line. We're busy saving our businesses from the pressures of the recession. We're busy slaying afloat. We're busy being, well, busy At the surface, this seems OK, normal even: Work hard, enjoy success. After all, there is nothing wrong with passionate and committed business owners who proactively manage their companies.

However, there's a lack of emphasis on devoting as much passion and commitment to the people in companies. Human capital is equally, if not more, important to a business" success.

Henry David Thoreau said. "It is not enough to be busy so are the ants. The question is, 'What are we busy about?'" In other words, what are our priorities? An argument can be made that employees are a company's greatest asset and have the most value to help a business recover from an economic downturn

"The strategic mind-set and desire to hire has been derailed." said Ramona Farrell, AVA, CFE, managing partner of Ueltzen & Company, LLP, a Sacramento-based forensic accounting firm.

"With the economic downturn, there has been reluctance--or perhaps an aversion--to hire or make a further investment in firm members. No one likes uncertainty and at the same time, you cannot allow uncertainty to become the strategic driver for a firm's lack of execution where human resources is concerned. Firms have deferred their strategic planning and human resource component for long-term growth and success to focus on the now ... on what is occurring today."

Farrell, a member of GalGPA's Management of an Accounting Practice Committee, recognizes the behavioral shift of CPA firms in the last two years a move away from investing in people in favor of rebuilding or saving their businesses--and believes the profession...