Manage
HR
It
is the quality and the standard of the human resource recruited
that plays a key roll in differentiating between a successful
organisations and a "run of mill" organisation . In
this section, we will discuss the issues relating to this valuable
resource through a series of articles. And yes, we are open
to contributions from masters of this Art ... Are you one?
Sponser
an Employee to Study Further
Why
do employers sponsor employee tuition programmes, such initiatives
attract competitors to their employees?
Inability
to comprehend the logic behind employer-paid tuition programmes
prompted Peter Cappelli, Director Wharton’s Centre For
Human Resources, to launch a research on the subject.
Peter wondered why employers would pay for employee education
that would prove useful to their competitors, who eventually
would resort to talent poaching! That makes sense, since, employees
who attend credential development programmes aim at better and
brighter future prospects. Another logical argument is that
if the programmes cater only to skill enhancement then in-house
training should suffice.
Cappelli’s
intensive research paid off. He finally found answers to all
his apprehensions. Research revealed that almost all employers
offer such credential development programmes. His study also
dispelled the myth that employers compensate the programme expenses
by paying a lower pay. In actuality this isn’t true. It
is assumed that employees having high levels of motivation and
hence more productive opt for such programmes.
These
programmes help employers hire better-qualified professionals
and are an effective retention tool. Moreover, since employees
catch up with work in their own time, employers need not provide
for overtime. If training had been mandatory employers would
have had to pay both for the training time and the overtime.
Tuition
demographics
Cappelli’s research shows that the hospitality industry
and business services industry are the biggest users of the
employee-paid tuition programmes. Retail and wholesale trade
come a close second. While food and tobacco, textile and apparel
paper, printing and publishing industries finish last.
Apart
from the variation in its usage among industries, the funding
and course menus also vary. Few employers pay the whole fee
while others expect employees to pay part of it. Also, some
companies have a list of work-related courses and employees
have to choose only from the list. Others give employees the
freedom to pursue a course of their choice. For example, The
Harleysville Insurance Co. encourages all its employees to pick
a course of their choice. (30% of its workforce is enrolled
for the programme.) Both the employees and management at this
insurance company believe that the programmes help them sharpen
their minds and keep them mentally alert.
Programmes
like these prove beneficial for employees, especially in times
of economic downturn. Employees undergoing company-sponsored
courses are less likely to be laid off.
It
is assumed that productivity increases because of these courses,
though there is no evidence. . Employers are at a definite advantage,
since they can get more work done, (as employees are assumed
to be better equipped) with the same pay. Cappelli emphasises
the need for incorporating tuition programmes in employee development
strategies. Measuring the benefits and impact of the course
on employee and organisational productivity can give a direction
to the organisational strategy.
Eligibility
Most
organisations have an eligibility criterion for offering these
programmes. The restrictive factor however, is the number of
years of service and management cadre in few cases. Studies
show that 57% of employers offer these programmes to employees
with one or more years of service. Though one year is not a
long time, industry trends show that only 45% of employees stay
for 4 yrs or more in one organisation. Hence, a one-year “gestation”
period is justified.
Age
and tenure are important determinants in exercising the course
options. At United Technologies, for example, the average tenure
for tuition benefits was 5 years while the average tenure in
the company is 15 years. Xerox Corp. adopts a similar pattern,
where the average age of the tuition recipient is 30yrs and
the average employee age is 40yrs.
Cappelli’s
characterisation sketch of employees who volunteer for these
courses shows that they are generally the crème de la
crème of an organisation. Since, such employees are self-motivated
to enhance their skills and knowledge they are in all probability
likely to perform better.
Arresting
turnover
Employer-paid
tuition programmes help lock employee turnover to a great extent.
Reasons:
Employees
see value addition
In times of economic downturn such programmes provide a sense
of security
Few companies have a bond of employment signed
The gestation period for the course eligibility compels employees
to stay with the company for that much longer.
Other
significant observations:
20%
of graduates have been provided with financial assistance by
employers to pursue their educational interests
24% of adults pursuing post-secondary educational courses were
recipients of employer-paid tuitions, and 53% received tuition
support or paid time off from work
Employer-provided financial assistance equals 33% of the average
annual cost paid by senior students
It is by far the most popular financial aid among employees
Employer-paid tuition programmes are gaining popularity both
among employers and employees. Employees have the obvious benefit
of skill enhancement. For employers it serves the dual purpose
of hiring better-qualified employees and lowering turnover costs.
Hence, organisations contemplating on different financial aids
should view employee tuitions as a lucrative financial assistance
option.
