Does Employee Education Build Loyalty?

Does Employee Education Build Loyalty?

by Alan A. Malinchak
 
As educators, we believe in the sanctity of learning and know in our hearts that education is a basic tenet for both personal and professional growth. That said, learning programs must be rooted in sound business decisions and financially viable returns on investment. Many times we argue that providing educational opportunities strengthens employee loyalty, which decreases turnover. Are we right?
 
Without metrics to justify this position, reflective thought is just that: reflective. Building metrics in collaboration with business needs and requirements, as well as objectively evaluating these metrics in an annual education and training report, will help learning executives determine if their organizations' current training opportunities are positively influencing employee retention - and thereby encouraging top-line growth.
 
Aligning Learning to Business Objectives
 
Before learning executives can link educational opportunities to employee loyalty and retention, they first must align learning directly with business objectives. To that end, leaders from each division must collaborate to create key performance metrics.
 
To ensure this collaboration, companies should consider a service-level agreement (SLA) between those responsible for delivering education and those in charge of business operations and revenue generation. This SLA should be reviewed by all parties on an annual basis as part of the company's strategic planning process.
 
Without this collaboration, proving the value of education and learning opportunities can be difficult. In some cases, it can result in a negative effect. For example, a well-known farm equipment company had a general attrition rate of about 2 percent. However, for employees who engaged in tuition assistance and reimbursement programs (TA/RP), the turnover rate was 18 percent - nine times higher than the average. Further, TA/RP cost the company $3 million annually, meaning the company was essentially spending millions each year to educate workers who were going to leave and create value for its competitors. The solution was for learning leaders to work closely with business executives to retool available training offerings.
 
Although the responsibility for developing and aligning education to business needs rests jointly with learning and business leaders, it is the CLO who ultimately must measure, evaluate and tweak these programs. For example, if reports suggest that accounting departments will lose about 30 percent of their senior employees to retirement in the next five years, tailoring training opportunities to support employees completing a current or advanced degree would be seen as value added to both the employees and the organizations. Learning leaders should work to identify employees with interests in particular fields of study and engage them through corporate university courses, tuition assistance programs and informal learning opportunities.
 
Further, CLOs should allow and encourage employees to use their newly acquired talents. The pragmatic application of these skills will not only increase organizational performance, but it also will strengthen employee loyalty. After all, just as college graduates are loyal to their alma maters, employees may feel a similar attachment to the institution that provided for and championed their growth and development.
 
Measuring Right, Measuring Smart
 
Next, to tie corporate education to business objectives such as loyalty, engagement and growth, learning leaders first must identify and use the following metrics.
 
1. The cost and associated savings of tuition assistance/reimbursement programs (TA/RPs).
To do this, the following must be measured:
 
a) The total percentage of the learning budget devoted to TA/RPs.
b) The total annual dollar cost of TA/RPs.
c) The total number and percentage of employees using TA/RPs.
d) The number of credit hours each employee has attained during the year.
e) The number of university partnerships the company has developed. Also determine the percentage discount given by each university partner as well as the discount given to spouses and dependents. Based on the total annual dollar expenditure for TA/RPs, calculate the dollar savings of these discounts.
f) The current status of each employee in a TA/RP, which can aid in determining the likelihood of retention. For example, consider that Employee A has achieved 66 of the 120 credits needed to graduate. Assuming nine credits can be acquired in a year, you might deduce that Employee A is six years from graduation.
 
2. Retention and turnover rates, cross-referenced with TA/RP data.
First, note the following:
 
a) The number and percentage of employees who voluntarily resigned during a calendar year.
b) The number and percentage of employees who remained with the company during the calendar year.
 
Next, examine the causes behind voluntary departures. Determine the number and percentage of both the voluntary resignations as well as the retained employees who were actively engaged in internal learning curricula, TA/RP or vendor certification courses.
 
3. The number of employees who enrolled in vendor curricula to obtain a professional certification or license.
The following data must be collected for each professional certification or license:
 
a) The total cost for each employee to get certified or licensed, which includes the cost of the course itself; the cost of travel, accommodations and incidentals; the cost of sitting for the exam; and the calculated loss of productivity hours.
 
b) The numbers and percentages of employees who passed and failed their respective examinations.
 
Next, determine whether your organization won new business or retained current clients based on an increased number of employees with each particular certification or license.
 
4. The cost of maintaining employees' professional certifications or licenses, including corporate university curricula as well as lost productivity hours.
 
Armed with the information above, learning professionals will be able to analyze the impact of education and training opportunities on employee retention and relate these numbers to broad financials.
 
 
[About the Author: Alan A. Malinchak is vice president and chief learning officer for ManTech International Corp., a provider of government technology solutions.]