Short of calculating ROI, other steps can and have been taken.
lthough
calculating return on investment for tuition-assistance programs is considered
impossible and irrelevant by most workforce managers, it has been done. In 2001,
Karen Calabrese, then a senior education consultant at Honeywell’s aerospace
division in Phoenix, polled her fellow employees about their ambitions and set
up a kind of do-it-yourself version. With the approval of management, she
contracted with Capella University to enroll 15 mainly self-selected middle
managers as a "cohort" in a two-year online MBA program. Capella tailored the
elective courses, using proprietary Honeywell information, to make the case
studies and class projects more relevant for the students. The students worked
individually and in teams, both at home and while traveling on business. The
cost for each came in under the $5,250 cap. "It was very, very hard," Calabrese
says. "We condensed 12-week courses into eight. I got a lot of frantic phone
calls."
Still, all 15 passed the course, several received
promotions, and 14 remain with the company. Many of the students’ projects were
turned into department-wide or personal initiatives. Afterward, Calabrese
calculated the program’s ROI using the well-respected formula codified by
performance-measurement guru Jack J. Phillips, author of Return on Investment in
Training and Performance Improvement Programs. "We figured the company made
about $1.2 million," Calabrese says.
Short of calculating ROI, other steps can be taken and
have been. For-profit adult schools and associated consulting firms, aware that
the idea of tuition reimbursement as a measurable cost-saving strategic asset
will eventually occur to workforce managers, already have cost-saving and
curriculum-focusing initiatives in place. They include:
● Outsourcing tuition reimbursement. Companies
that want to eliminate waste without a major change in philosophy engage companies like Edcor in Pontiac, Michigan, to handle the nuts and bolts
of tuition reimbursement. This includes negotiations with and payments to
schools and assessment of employees’ eligibility and progress. It tracks grades
and usage trends to "close the holes in the system," Edcor’s Lance Ross says.
The company charges per employee transaction, handles $330 million in total
reimbursement, and claims to have cut one client’s yearly bill by $4 million.
● Using educational consultants. Faith Ivery of
Educational Advisory Services in Scottsdale, Arizona, is a big proponent of
aligning corporate training with educational reimbursement, but confesses that
she hasn’t made much headway with her clients. What she has done successfully,
she says, is steer them around the potholes of the adult-education system. "For
example, most people don’t realize that the University of Phoenix has a
60-credit residency requirement," Ivery says. She explains that approximately
half of a student’s undergraduate-degree requirements must be earned from that
school no matter how many credits he or she has piled up previously. To save
time and money, she points students toward "credit-banking schools" like Empire
State College in New York, which accepts credits earned elsewhere, gives its
own credits for "life experience" and issues fully accredited degrees.
● Forming "corporate alliances" with for-profit
schools. Most for-profits have marketing initiatives that involve tuition
discounts, customized course offerings, intranet sites and even the
establishment of work-site classrooms in return for a long-term agreement. "We
find that our corporate partners have a higher commitment to upgrading their
workforces," says Robert Silberman, CEO of Strayer University, a for-profit
school in Arlington, Virginia. The downside, Faith Ivery says, is that
corporate training needs may change too fast for the schools to respond, and
they may bail out of the agreement if employee enrollment drops.
● Aligning internal training and development
with adult education. Examples of this are few and far between, but they do
exist. Allstate Insurance, for example, runs a fairly conventional
tuition-reimbursement program for all except one sales and distribution
business unit that has put forth an "education blueprint" for its employees.
"We’re looking at future leaders and where they’re lacking in skills, and
looking at what we can provide for them both internally and externally," says
Sue Benbrook, a senior human resources consultant for resource education.
"They’re told, ‘Here’s a suggested format for you.’ The company is just now
starting this."
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