Several of the world’s largest employers have created strategic alliances with universities in an attempt to address one of the highest priorities facing corporations: how to attract, retain, and develop key talent.
Virgin United has spearheaded the 100% Human at Work initiative, which has “brought together a network of more than 150 organizations around the world that have helped us to shape and identify the elements that define a 100% Human Organization.”
The B Team, a global nonprofit initiative co-founded by Sir Richard Branson and Jochen Zeitz has a line-up of talented business leaders—including the CEOs of Salesforce, Allianz Group, Mastercard, the UN Foundation, and PepsiCo—who share a central mission: the creation of “business models and environments where all employees can thrive today—and in the workforce of the future.”
With all the best intentions, even with many of the world’s business leaders on board, most corporate development plans fail to achieve their objectives. Tuition reimbursement plans often are regarded as merely a perk to employees, rarely designed to solve complex corporate initiatives.
Corporate educational training is polarized. On one hand, there are short, skills-based, non-award courses often in the form of internal training or via external sites such as Udemy, Coursera, and other aggregator platforms. The short course advantages include low cost and targeting of specific skills. However, these courses rarely increase staff retention or build corporate loyalty. Further, because they are not formally recognized, they don’t lead to meaningful career development.
At the opposite end are formal university qualifications. These have the advantage of building long-term retention, employee morale, and loyalty, as degrees can run over years. The disadvantages are that degrees are more expensive, and university degrees often are disconnected from the immediate skills needed to solve current challenge.
Short course providers offer various band-aid recognition solutions such as badges and certificates that can seem like a trivial acknowledgement. Consider a manager evaluating a promotion prospect who has a badge in Effective Communication. What does the manager make of this? On the other hand, the same manager may have strong preconceived ideas about the quality and reputation imbued in an MBA, even if they find it difficult to draw a direct line between an academic MBA and the ability to tackle complex business challenges.
What Is the Corporate Impact of Poorly Executed Strategies?
Significant! According to SHRM (Society for Human Resource Management), the cost to replace a salaried employee is equivalent to 6 months’ salary—and that is just the out-of-pocket costs. Then there is the impact of lost productivity and, possibly worst of all, the corporate knowledge and intellectual property the organization loses. According to CIO Magazine, the true cost of turnover could be “as much as 2.5 times an employee’s salary depending on the role.”
Rethinking the Future of Workforce Development
Is it possible to offer a recognized but affordable Bachelors or MBA degree, ensuring retention of key talent?
Is it possible to deliver university accredited degrees, meeting all the compliance requirements for formal accreditation, while also being agile and customized to solve individual corporate needs?
By developing a new model of collaboration between EdTech and traditional universities, we believe the answer to these questions is, “Yes!”
5 Steps to Developing a World-Class Employee Retention and Development Strategy
1. Applied and Customized University Degrees
The first step is to define the strategic objectives and long-term skill sets the organization seeks to develop in its staff. Perhaps it’s developing an entrepreneurial, problem-solving culture, or striving to integrate all business lines for better customer service. With its university partners across the globe, Dūcere Global Business School (https://www.ducere.edu.au), for example, tailors degrees to the strategic needs of customers.
In an MBA program delivered to management at 20thCentury Fox, the subject of Organizational Behavior required research on industry best practices, analytics, and recommendations tailored to the strategic issue facing the client: culture change during a major merger (with Disney Corporation). Managers work toward their MBA while also solving critical business challenges.
The cost of university tuition ranges considerably between universities and across different jurisdictions. Online degrees overcome geographic boundaries, providing access to quality education at affordable prices. If structured correctly, pricing structures can fit within a corporation’s tuition reimbursement plan.
Initially, this may be challenging as typically a tuition plan (averaging around $5,000 per annum for most major companies) is only a fraction of university fees, therefore, making the corporate support more a gesture of goodwill than a viable solution.
Dūcere has developed pricing models based on scale and efficiency, coupled with scholarships to allow for a scalable take up of degrees, at an affordable price. In some cases, Dūcere has been able to deliver university MBAs for total tuition fees as low as U.S.$7,000 per student.
3. Retention Policy
By directly linking tuition support to a minimum retention period, key employees stay longer, become more productive, and increase morale through their increased impact on the corporate bottom line.
Corporate Education Retention Policies can’t be generic as they need to be streamlined around a number of factors, including: overall financial commitment, position of the employee, expectations for ROI, and reasonable lock-in period. Often, a two-year commitment is required post-graduation.
4. Development of a customized learning plan
In Step 1, we looked at the overall corporate strategy. A successful strategy also requires a customized personal learning plan with each employee and his or her manager. The plan should stipulate the program of study, specific skills development, and the organizational objectives to be achieved.
In undertaking the MBA subject of Entrepreneurship and Innovation, KPMG senior staff members were tasked with determining how the professional services firm should engage with the start-up eco-system, considering structured approaches based on survey data, current trends, and industry benchmarks.
5. Analyze ROI
Creating a Workforce Development Plan that becomes a long-term viable proposition requires a clear analysis for a strong ROI. The ROI for typical tuition reimbursement is 240 percent, according to LinkedIn Learning. An average $2.40 return for every dollar invested is a strong outcome; however, the true return could be much higher when programs are customized to meet company’s needs. ROI can be measured through: attracting the best talent, retaining the best talent longer, reducing turnover costs, reducing downtime through turnover, reducing training costs of new hires, and increasing productivity.
As part of an MBA program with PwC, under the subject of Digital Operations, managers were asked to Investigate tangible opportunities for artificial intelligence (AI) in the professional services sector and make recommendations on how professional services firms could capitalize on this emerging technology.
A successful Workforce Development Plan needs to establish an environment that creates a win for both the employee and the corporation. Employees seek world-class university qualifications that provide opportunities for meaningful career growth. Employers are committed to retaining quality talent, as well as advancing strategic organizational goals. An effective company-university partnership meets both of these objectives and can be transformative.
Mat Jacobson is the founder and CEO of Dūcere Global Business School. He works with presidents, prime ministers, global CEOs, and other leaders to deliver on the vision of providing sophisticated tertiary qualifications. The Dūcere Foundation funds improvements to public education systems across African nations. Dūcere’s vision is to create a University group with the most industry-applied, career-focused qualifications and to provide universal access to world-class higher education. Currently, Dūcere operates in four continents including offices in the U.S., UK, Australia, and Africa.