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College Refresher

August 8, 2007
Related Topics: Career Development, Employee Career Development, Workforce Planning, Featured Article
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In a true world-class organization, HR leaders would track key analytics to determine the ROI of all programs in their purview. In reality, few organizations officially track the best- and worst-managed programs in HR. If they did, educational reimbursements for college degrees would be a serious contender for the worst- managed—or least beneficial—program in HR.

    If you were to review the typical education reimbursement program found in many corporations today, these are some of the problems you would find:

    Lack of formal management: Even though college education is a development channel, most reimbursement programs are coordinated as a financial benefit resulting in little more than cost containment and payment administration. There is rarely a written plan detailing how the organization will leverage the education being received by the participating employees. There are no yearly program goals or pre-established success measures. In the rare case that you find a formal program manager, it is unlikely that person could tell you the graduation rate, retention rate after graduation, or the impact of the educational attainment on the individual’s current job performance and promotability.

    Lack of accountability: In my more than 30 years as a practitioner and advisor in this field, I have been unable to find a single large company where individual managers are measured and either rewarded or penalized based on the performance of employees who are leveraging reimbursement programs. In most cases, because the reimbursement is not charged back to the manager, there is little thought behind authorizing employees to pursue degrees or in coordinating their endeavors to provide value to the organization. In a few cases, I have seen managers use this "benefit" as a performance management tool, hoping that education will improve a bad employee.

    Slow payback: Part-time degree programs take many years to complete and can easily cost more than $50,000. While most leadership development programs have payback periods as short as a few weeks or months, reimbursement programs could take years to provide payback. More often than not, participants in such programs become distracted from doing their current job well or are frustrated when real life doesn’t mimic or demonstrate concepts taught in the classroom.

    Self-selection: Because employees are often allowed to select their own school, major and courses, it is entirely possible that the curriculum will not be relevant to the current or future needs of the company. All too often, companies fail to formally outline in advance what it expects in return for its investment. Once employees begin their studies, there is generally little advice or direction given by managers.

    Lack of utilization drives frustration: Quite possibly the biggest failure of reimbursement programs is that they do not recognize an employee’s achievement upon completion of the program by finding ways to leverage the employee’s growth. Because individual progress is not formally tracked and is independent from the performance appraisal and career planning processes, there is all too often no significant recognition, such as an increase in pay or job responsibilities, after completion of the degree. This "silence" not only frustrates graduates, it forces them to leave the company in search of an organization that values their achievement. More than 68 percent of employees pursuing an MBA use such programs to separate from the company within one year of graduation!

    If I’ve just described your company’s educational reimbursement program, here’s what I recommend: Make the business case for handing the program over to the training and development team, and for appointing a formal program manager. I’d suggest that individual managers be held accountable for employees leveraging the program, and that each employee be given a specific set of skill and learning objectives. Finally, consider having a portion of the program cost charged back to the department in which the employee resides, and treat reimbursement like a loan, requiring employees to pay back a portion of the costs if they leave within two years following degree completion.

    Without these measures, reimbursement programs are nothing more than a mess, with high costs, little or no management and, possibly, negative returns.

Workforce Management, June 25, 2007, p. 66 -- Subscribe Now!

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