Discerning the Incremental Value of Education: Moving From Intuition to Fact
By Jennifer Moss, Ph.D., Assistant Director, Bellevue University Human Capital Lab
If a teacher affects eternity, then what impact could an educational program have for us, especially in these troubled, economic times?
When discussing the value of learning, most of us sit solidly on one side of a very tall fence. Either education is valued as a “given”, not needing justification for its existence, or, education must be quantified, and therefore, only of value if we can put some concrete value on its delivery.
An organization, facing the decision whether it should continue matching 401(k) contributions or cease providing tuition assistance to workers, faces a difficult decision indeed. I read an interesting Business Week(1) article recently that discussed McDonald’s and their changing view of allocation of employee benefit dollars. Valuing their talent and wanting to retain them, McDonald’s initially felt that offering a well-funded 401(k) program would help retain their best managers. McDonald’s was surprised to find however, that this investment was not especially desired by employees. Upon further research, McDonald’s managers responded that they valued education over retirement, and that educating themselves and their children was of highest priority.
The most impactful message from the McDonald’s case is that employees, in good times and bad, intuitively seek to develop themselves. McDonald’s managers prefer their company invest in their education, as it is a benefit to be utilized almost immediately. The 401(k), by contrast, cannot be utilized without penalty until much later in life; some wisely question whether 401(k) funds are going to be there for them when they need them at all.
So, how are organizations making tough decisions about how to allocate limited employee benefit dollars? The goals have not changed – recruit, retain and advance the best talent, fill the leadership pipeline in anticipation of our looming manager shortage, engage employees for greatest productivity, and build both employee and customer loyalty. Should organizations rely on employee input for these tough decisions or do they need more concrete data to make their decision?
Some learning pioneers are beginning to capture the attention of top decision-makers. In a previous Tapwire article, Elizabeth Hibner and Jennifer Murnane make a strong case for aligning tuition assistance programs directly to overall corporate strategic goals. They cite Verizon Wireless, a leader in Learning and Development initiatives and measurement, who found their tuition assistance programs resulted in a 50 percent reduction of turnover among employees utilizing their tuition reimbursement program(2). When comparing the cost of retaining versus losing an employee, I am sure Verizon Wireless had little trouble deciding and supporting their decision to fund employee education.
CAEL has a long history of helping organizations streamline their tuition assistance programs. But they, too, are seeing a decline in corporate sponsored tuition assistance programs. Perhaps a recent Bersin & Associates/Bellevue University Human Capital Lab study will shed some light on the reasons. The Bersin report stated the necessity for organizations to align their tuition assistance programs with corporate strategic goals; for without measurement of impact, TA programs are only viewed as cost to the organization. Bersin’s research found that while 87 percent of organizations in all industries and of all sizes offer TA funding ($16.5 billion/year), only half utilize some sort of measurement of outcomes of those benefits. Other sources have estimated that as few as five percent of organizations attempt to measure the value of their learning programs. Why aren’t we measuring the value of our education?
Whichever side of the fence decision-makers stand regarding educational investment, it is clear that they do not need to be making these decisions “in the dark”. There is now clear evidence that not only do employees seek career growth through educational advancement, but corporations stand to increase both top and bottom-line growth through tuition assistance programs. In addition, thought-leaders in the area of higher education and measurement are creating the tools that enable organizations to understand not only intuitively, but financially, how investment in learning is never a losing strategy. Thoughtful, planned, TAP’s that are aligned with overall strategic goals can offer organizations competitive advantage through higher retention rates, increased career advancement, higher performance and increased loyalty from our shrinking talent pool.
Think again about the opening quote. If a teacher affects eternity, then how much could organizations collectively affect the cosmos? Not only would they gain the loyalty of a trained workforce, they would positively impact their competitive advantage in addition to the collective knowledge of our planet.
We never know where our influence stops.
Citations:
Bersin and Associates (2008). The Role of Tuition Assistance in Building and Managing Human Capital. Full report can be retrieved at www.humancapitallab.org
Young, L. (2008). McDonald’s Supersized Retirement Plan. Business Week, December 31.