Providing educational opportunities for employees is not only a way to do right by workers, they said, but it’s also good for a company’s bottom line.
“If you have well-educated and well-trained members, that equates to more engaged employment, which equates to greater levels of satisfaction, which equates to greater loyalty, which equates to greater growth of the business, which equates to greater profitability,” said Kimo Kippen, chief learning officer and global talent development leader and brand ambassador at Hilton Worldwide, a global hospitality company.
Speaking at an event titled, “Win/Win Making the Business Case for Employee Talent Investment,” Kippen called the decision to invest in employee education a “no-brainer argument.”
“At the same time, we need data to support that,” Kippen said.
That’s where a new study released Monday by the Lumina Foundation, an Indianapolis-based nonprofit that focuses on increasing postsecondary attainment, came in.
The report, “Talent Investments Pay Off,” examined the return on investments of an education reimbursement program (ERP) at Cigna, a health insurance company.
The study found that, for every dollar the company spent on tuition assistance for its employees, it received each dollar back and saved an additional $1.29 — essentially a 129 percent return on investment — in “talent management costs.”
“And if a company’s results are even half as great as Cigna’s, that means it’s not a cost-center but an investment,” said Haley Glover, strategy director at the Lumina Foundation.
Sarah Armignacco, HR director of educational initiatives at Wegmans, a food market chain, spoke of how the company began a scholarship program 30 years ago when it realized a third of its workforce were under age 21 but few were graduating from high school.
Through a scholarship program, which is run in conjunction with the Hillside Work-Scholarship Connection, the company has improved the high school graduation rate from 28 to 95 percent among its employees. In addition, a 100 percent turnover rate has been reduced to 17 percent, which she said represents $1 million in avoidance of turnover costs per year.
Currently more than 5,500 employees receive tuition assistance through the program, which provides up to $1,500 for the academic year for part timers and up to $2,200 per academic year for full timers.
The tuition assistance has been an “incentive to get them to graduate and see a brighter future for themselves,” Armignacco said. And the company gets a better pipeline of future managers, she said.
Philip Smith, a Chick-fil-A franchise owner in Texas, recounted how he got fellow Chick-fil-A franchisees involved in tuition assistance after he lost an employee to another company that had a generous tuition assistance program.
Determined not to lose any employees for the same reason, Smith teamed up with an education benefits company called InQuisic, which he said was able to create customized solutions for franchises, specifically, web portals that can be accessed by the employees and franchisees alike.
Now, Smith offers up to $1,000 per year for employees who work 24 hours per week for at least 12 weeks. Employees must maintain a C average to keep the benefits.
Smith spoke of an employee who used the tuition assistance to get trained in HVAC and now is able to use his expertise to keep Smiths’ HVAC systems running smoothly.
“So that benefits both of us,” Smith said.
Since Smith partnered with InQuisic, 30 fellow Chick-fil-A franchisees have followed suit and more than 100 Chick-fil-A employees are pursuing $100,000 in tuition reimbursement through the program.
Smith challenged business leaders to consider, after creating a remarkable experience for customers, “How are you making an impact on our company and employees?”
At Monday’s event, business leaders announced a new partnership with LearnUp — which describes itself as a “pre-hire skills coaching platform” — to help 500,000 job seekers with “access to the skills needed to get hired and build careers” by 2017 with three companies: 365, a new venture by Whole Foods Market; Sheetz, Inc., a convenience retailer; and The Fresh Market.
A press release states that applicants who complete LearnUp’s pre-hire skills coaching are three times more likely to be hired, and that the turnover rate for LearnUp hires is 10 to 30 percent lower than non-LearnUp hires.
Jamaal Abdul-Alim can be reached at [email protected] or follow him on Twitter @dcwriter360.
