Years ago — before Sarbanes-Oxley and shared services directed HR actions — most companies had directors of external employee education. They were part of a company’s learning function, experts who could reduce tuition costs and evaluate curriculums and institutions offering degrees to support business objectives. They sought out the best continuing education investments for employees and the company.
Today, external employee education is often taken with tuition assistance funds, but there is no tracking and little direction for employees. Add to this the fact that most employees select colleges or universities from seeing an advertisement. Schools know this, which means those with the biggest marketing budgets attract more students.
Providing information and resources for education funds is not enough. Administration for employee tuition requests and reimbursements should be within the benefits administrators’ purview, yet external employee education is part of the CLO’s mandate. Without the expertise of an academic learning specialist on the CLO’s team, there exists a real “buyer beware” problem, which could cost a company and its employees too much. Here’s why:
External employee education policy must be customized to meet business objectives. Most tuition assistance plan, or TAP, policies are designed by administrators, not experts in academic options and opportunities. The policies are often boilerplate. But no two companies’ learning needs are the same; therefore, no two companies’ external education policies should be the same.
Policy should be designed to meet specific corporate objectives, and all else should flow from that mandate. Ask the company: Why do we have tuition support? What do we want it to do for our company? If there are no easy answers to these questions, with metrics to back them up, why offer financial support for employee education? As a bone to throw to employees, or a must-have because other companies offer it? Yet, if policy is designed by an expert, it can support a company’s present and future needs.
For example, massive baby boomer retirements may cause a loss of professionals in accounting. Leaders can adjust policy to offer incentives to employees studying accounting by paying for their books or adjusting the maximum amounts for reimbursement; tiered policies and incentives can meet needed demand. Although TAP is open to all employees, every employee may not need the same funding.
A few companies have opted to pay only for colleges and universities that have professional accreditations from the Association to Advance Collegiate Schools of Business or the Accreditation Board for Engineering and Technology in addition to regional accreditation. They recruit from these schools and require their adult learners or employees to attend these schools. However, without an academic expert on board, they likely do not know these accreditations are traditional in their requirements from their members — academic educational institutions.
Accreditations were established to separate students from each other. The traditional student is 18 years old with little to no experience. However, when evaluating the adult student, experience is a big asset. They need different higher education options than those living in a dorm and attending school full-time.
For example, it will take adults attending an AACSB/ABET program, taking one course per term, about 13 years to complete an undergraduate degree — if they find courses in the evening or weekend. Further, not all employees want to be the vice president or higher, nor do they have the aptitude. There may be separate tuition funds for those in leadership pipelines who request to attend AACSB/ABET curriculums given the greater time and money they cost. These accreditations are solid, but are not for everyone.
Preferred networks and onsite classes may be short-term solutions to a bigger problem. Colleges and universities want to attract adult learners with TAP funds to spend. But a small, short-term discount on tuition rates is not a long-term organizational solution. The important figure is the cost of the degree, not the cost of tuition. This is a different perspective than employee benefit administrators can provide since they are charged with keeping costs down.
Hundreds of higher-education providers offer ways for adults to have their college-equivalent knowledge evaluated for college credits. These options provide significant savings for the employer and time savings for employees completing their degrees. Discounts on tuition are useful but are not the only resource available to reduce the cost of a degree. Onsite classrooms are more valuable to a school’s revenue than to employees. Many onsite programs deteriorate after one to two years. Adult students drop in and out of learning, classroom size diminishes and sponsor schools pull the class from the onsite location. Further, many learning providers do not allow for an influx of instructors or different curriculum. Education becomes a “cookie-cut” production when employees need experience with other students and instructors from different sources to enhance knowledge, problem solving and creativity.
Employees need direction, not directives, for provider selection. Employees are consumers of higher education, and yet they have no resource to know what is out there and how best to use institutions for their careers and the company’s bottom line. They need a resource to analyze and compare providers, costs, acceptance of transfer credit, formats and prior learning for credits.
There are thousands of colleges and universities that have addressed these issues by designing programs specifically for adult students. These are good schools with good programs. But employees may only hear of about a dozen — those schools with the biggest advertising budgets — and they enroll in them. Provider selection affects everything from the cost of the degree, time to completion and best use of funds to achieve goals.
A consumer watchdog for higher education would not go amiss. For instance, there are more than 40 institutions of higher education — community colleges, nonprofit, public, for-profits — that are on some kind of regional accreditation notice, warning, probation or retraction, but many companies continue to pay for lower-ranked education. Further, if 100 employees receive college credit from a College Level Examination Program test or American Council on Education military learning, a company can save $100,000 off tuition costs. Massive open online courses are being created that grant college credit and may provide advantages for employees looking to gain low-cost credits. There are myriad options that employees don’t know exist.
External education must support talent management. There is an old dilemma at work, to buy or to build talent. Most companies recognize both are necessary to sustain a workforce. Yet, employees often have no resources or policies to guide them through higher education to meet their company’s talent objectives. Provider selection is a hit-or-miss, random use of funds. Also, external employee education is rarely linked with a learning management system or staffing needs. When an employee with an MBA in accounting leaves, most companies turn to recruiters to replace that need before they consider integrating TAP data into a cohesive solution for staffing. If a company just paid for an employee to graduate with an MBA in accounting $40,000 or more, why not use him or her to fill internal staffing needs? The other option is to pay the $40,000 but give that talent to a competitor.
“The benefit (from external employee education) is that you are sharing the cost of developing employees with the employee, so the employer can get the skills they think are necessary at a fraction of the cost of either hiring in those skills or securing them through training,” said Peter Cappelli, professor of management at the Wharton School and director of Wharton’s Center for Human Resources at the University of Pennsylvania.
Use easy metrics to prove ROI. Metrics can be simple mathematics with raw data. Some of the necessary information can come from the tuition assistance department and others can be added to required data collection. Most data collected by TAP is simple and linked with the transaction process, such as how many employees used tuition assistance funds, what schools they attended and how much was spent. This is a good start, but more can be captured and used for strategic goals.
A valuable metric might be how much was saved. This can be derived by asking employees to self-report credits they received from prior learning, transfer credits, testing options, corporate and military training. If employees knew about these options and which schools provided them, they could participate to save themselves time and save the company money. TAP policy should support these options, thus assistance program administration could document which options employees use. Keep track of graduates and use them throughout the company by linking tuition assistance reports to staffing needs. Another way to ensure TAP dollars are spent wisely is to make sure employees study subjects needed for business objectives.
Saving money and increasing talent capability are two of the CLO’s objectives. Those who recognize the potential in external employee education to facilitate goal achievement can demonstrate a usable return on investment for TAP and get the ear of C-level executives. External employee education is learning, not just an employee benefit, and it needs the attention and direction from specialists in academia and business.
Companies often put a lot into tuition assistance and get little for it. CLOs should teach employees about higher education, what their resources are and guide them to options that make the best sense for them and the company. Help employees take the “beware” out of buying higher education.
E. Faith Ivery is president of Educational Advisory Services Inc. She can be reached at editor@CLOmedia.com.