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Offering Training and Continuing Education Opportunities

Digital Library > Human Resources Management > Employee development “Offering Training and Continuing Education Opportunities”

Tight labor markets require creative ways to keep your staff loyal to your company. Continuing education can improve your competitiveness by providing a great perk and keeping your staff on the cutting edge of your industry.

OVERVIEW [top]

Along with a communicative employer, a sense of fun and challenging work, employees today routinely say they want a job that provides them a chance to learn and grow.

Considering that it costs a company 2.5 times the employee’s annual salary to find a replacement, it makes economic sense to keep good employees by spending generously toward their continued education. The Bureau of Labor Statistics reports that about 38% of small private businesses offer educational assistance to all employees, and 56% offer it to professional and technical employees.

"You see companies investing millions on the latest machinery, but the people who are running the company are stuck with the model that came out of college in 1992 or 1982," says John Reh, a management consultant in Seattle, Wash. "It behooves the company to invest in the employees to improve their skills."

In this Quick-Read you will find:

  • Benefits to the company from continuing education programs.
  • Benefits to the employee from continuing education programs.
  • Several popular and innovative ways to create instructional opportunities.
  • Cost considerations and ways to think economically.

SOLUTION [top]

Benefits to the company

Training enhances the productive capacity of workers, expands the company’s knowledge base and fosters employee loyalty.

Greater loyalty alone can more than offset the cost of training initiatives by improving the employee-retention rate. Turnover is expensive: recruitment, HR and administrative costs for processing the departing employee out and the replacement employee in; the cost of lost productivity during a period in which a position remains unfilled; and the cost of training and evaluating a new and untried employee. (Guidelines for determining your turnover costs may be found in the Quick-Read, "Understanding the Costs of Employee Turnover.")

"It’s odd that employers don’t understand that," says Fred Haskett, director of client relations with the Jones Graduate School of Management at Rice University. "Instead of improving the person’s abilities, they let the person go."

Strong training programs also aid in recruitment. "Because one of the key values for people is to stay marketable, providing continuing education is one of the most important keys to attract and retain employees," says Joyce Gioia, president of The Herman Group in Greensboro, N.C.

Benefits to the employee

A training program helps employees in several ways:

  • It shows the company’s concern for the employee’s personal growth and professional success.
  • It gives employees the skills they need to tackle greater responsibility at greater pay.
  • It keeps employees current with skills and thinking in their field and permits them to learn from peers both inside and outside the company.
  • Employees who train together develop a better understanding of colleagues and form productive relationships across departmental lines.

Creating instructional opportunities

To begin thinking about creating continuing education opportunities, it helps to group options in three categories.

  • On-site programs: These include corporate training departments, consultants hired to provide workshops, computer-based training and peer-to-peer training. At very large corporations, on-site "corporate universities" often have instruction and content provided by off-site institutions.
  • Off-site programs: These include seminars, conferences, college classes, degree or certificate programs, travel-study, employee exchanges, sabbaticals and distance learning from the employee’s home.
  • Hybrid programs: These would include distance learning programs or programs that involve collaboration between the company and an education provider to create customized training, some of which may be offered at the job site and some at a campus or through the Internet. By customizing training with outside schools or consultants, the company can integrate class work with company projects to create practical instruction with profitable results.

Cost considerations and thinking economically

Training initiatives need not be expensive. To keep costs under control, get creative. But remember, at the outside, full-tuition reimbursement for an advanced degree still is likely to cost less than the cost of replacing that employee.

First, consider needs, and set objectives. Ask employees and their supervisors what they want. Then find the resources to deliver that training. Do any employees have the skills to teach or mentor in-house? If not, consider giving workers time off to take classes.

Supplement tuition at local colleges. Ideally, say some consultants, tuition reimbursement should be open to all employees without caps or limits. Any amount greater than $5,250 granted to an employee for work-related education in a given year will have to be reported to the IRS as employee income. Because the employee will have to pay tax on the education subsidy greater than $5,250 and it entails extra accounting work, the value to both the employer and employee is diminished at that threshold. The employer can still deduct education grant money above the $5,250 threshold as a business expense.

CAVEAT: Realize, too, that one risk you run is that more-educated, more-marketable employees may be marketing themselves to your competitor(s). Be prepared to pay your employees for their higher level of skills. It’s not hard to turn up examples of companies that pay to educate their employees only to have them leave soon after completing their degree. Don’t squander your education investment by not providing an appropriate increase in salary. Your competitors will be happy to pay more for an educated, experienced employee. The search for a new job usually begins before completion of the degree, so let your valuable education-pursuing employees know early on how you expect to compensate them once they have the degree in hand.

REAL-LIFE EXAMPLE [top]

By seeking out creative solutions to its training needs, IHS Help Desk Service Inc. in New York City cut its turnover from 60% to less than 30% in one year.

IHS hires, trains and staffs help desk personnel at client work sites all over North America. High pressure and burnout were driving people out the doors when Jeff Brown arrived in late 1998 as vice president of training and development.

"One thing that was showing up on exit interviews was that employees wanted more opportunities for training," Brown says. So IHS doubled its training budget to 3%. That comes to about $1,500 per employee per year, with $1,000 dedicated to tuition reimbursement. Management also looked inside the company, pairing senior analysts with new hires in a mentoring program. And it embraced distance learning to serve employees scattered all over the continent.

Brown says collaborating with the Help Desk Institute to create certification training for help desk analysts has positioned IHS to provide training to employees of other companies.

There’s more: "We encourage our employees to attend professional development seminars," Brown says. "And we’re negotiating with local community colleges to sponsor programs for our analysts."

DO IT [top]

  1. Begin with a company-wide assessment of current and future needs for employee talent.
  2. Identify in-house training skills and consider mentoring or staff-taught classes.
  3. If you don’t have the money to fund training fully, give partial tuition. If that’s too expensive, give time off to attend class. If time off to attend classes would cause scheduling problems, offer financial assistance only if staff attend on their own time.
  4. Specify that you will reimburse only for courses from institutions accredited by reputable agencies. Training scams are proliferating especially rapidly on the Web. The Resource section below shows listings of accredited institutions. Accreditation status also can be determined by calling the admissions unit of a local college and asking if transfer credit from the institution in question would be accepted.
  5. Call any nearby large companies that you know host corporate universities, and ask if you can arrange for your employees to attend any of their training sessions.
  6. If it’s affordable, set up and fund an Individual Development Program for each employee. The supervisor or human resources manager should oversee it, but the employee should have an active role in defining objectives.
  7. Give each employee discretion to spend from the IDP on targeted training, professional development seminars and conferences, or simple enrichment (unrelated to work) classes.
  8. Hold regular "brown bag" seminars open to all comers. Topics can range from company policies to benefit plans to security issues to the path for promotion to management.
  9. Encourage any employee who takes a class paid for by the company to share its benefits at a brown-bag seminar.
  10. As an incentive to learn, tie training and achievement of learning goals to advancement and compensation structures.
  11. Project how much you might have to pay out in raises when more of your staff have more skills and do more things for the company.

RESOURCES [top]

Books

Lean & Meaningful: A New Culture for Corporate America by Roger E. Herman and Joyce L. Gioia (Oakhill, 1998). Chapter 11: "Personal and Professional Growth."

Accredited Institutions of Postsecondary Education, Programs, Candidates (American Council on Education, annual).

Guide to Distance Learning Programs 2001, 5th edition (Peterson’s, 2000).

Independent Study Catalog, 7th edition (Peterson’s, 1998). Correspondence course listings. "Other Benefits: Educational Assistance Plans," 341:501-341:511 in BNA Policy and Practice Series: Compensation (Bureau of National Affairs, 4-volume, loose-leaf service). Similar detailed legal and tax rules also are available in publications from the publishers CCH and RIA. Any large public or college library should have legal and tax publications from at least one of the three.

Articles

"Amounts received under a qualified educational assistance program" and "Qualified educational assistance program," Code of Federal Regulations Title 26, Chapter 1, Sections 1.127-1 and 1.127-2.

"No Train. No Gain," Idea 23 from 101 Great Ideas for Managing People from America’s Most Innovative Small Companies (Inc/Goldhirsh, 1999).

"Pay ‘Em to Play" from 301 Great Customer Service Ideas from America’s Most Innovative Small Companies (Inc/Goldhirsh, 1997).

Internet Sites

Accredited Institutions (directory), Distance Education and Training Council

Directories. Council for Higher Education Accreditation. Lists approved accrediting organizations, which in turn list accredited schools.

American Society for Training and Development

Rice University Executive Education

OnlineLearning.net (UCLA Extension)

University of Phoenix

University of Maryland University College (Online learning)

Quisic, formerly known as University Access

Article Contributors

Writer: Stu Watson

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