With the unemployment rate hovering at the highest level in 26 years it’s hard to imagine that any company would be focusing on employee retention. However, according to a recent Wall Street Journal article, 60 percent of working Americans plan to switch jobs when the market improves. Over the last several years, companies have continued to decrease their labor force in order to save money resulting in an increased work load, extra hours at the office and less vacation time for the employees left behind. As the market begins to improve and jobs openings become more common, there will be significant movement in the labor market as employees make (often long-delayed) job changes.
Prudent companies are already positioning themselves to mitigate these future losses as much as possible. Companies ranging from Wal-Mart to a small maid service in Ohio are taking steps to increase employee satisfaction while also driving business results. Wal-Mart, the largest private employer of Americans, is set to launch a $50 million tuition assistance program for full-time employees who have worked at Wal-Mart for over a year (or part-time employees who have worked there for three years).
My Maid Service, based in Lebanon, Ohio, is following a similar strategy with a twist. In order to increase retention they are paying for their workers to go to school in any field they choose. In essence, they are training their employees to move on to other careers. While this might seem counterintuitive, turnover at the small company dropped from 300 percent in 2007 to zero in 2009. This has not only reduced the company’s overhead expenses but it has also increased customer satisfaction. Customers were becoming increasingly uncomfortable with the constant turnover and unfamiliar employees having access to their homes. Although the owner expects attrition to pick up next year when his first crop of employees graduate, he believes this process will help him retain new employees.
The Bureau of Labor Statistics recorded more resignations than layoffs in February for the first time in 15 months. As the market continues to thaw, the number of resignations will grow as overworked and underpaid employees begin seeking other employment. In order to save money and retain the best possible workforce, companies would be well advised to head these market signals and begin taking action now.
Tuition assistance is a good thing. However, too often it is viewed as a benefit only to employees, rather than as an investment that drives business results. It can – and should – be both.
One of the really important attributes of investing in employee education is that it has the potential for being a true “win-win,” making both employees and employers better off. But when tuition reimbursement is treated as a “benefit,” it becomes an expense. And expenses have to be carefully controlled. An opportunity is lost and HR is once again in the position of trying to justify itself and its programs.
There can be real advantage to rethinking how tuition assistance budgets are spent, and reframing them explicitly as programs that can benefit the employee and the employer.
Bellevue University is an industry leader on this front and is worth a serious look. (In the spirit of full disclosure, I should note that McBassi is partnering with Bellevue on a joint project. We’ve chosen to work with them because of their leadership in this area, as we’re always looking for opportunities to foster win-wins.)
Bellevue is an important innovator in its thinking, methodologies, and experience in overhauling tuition assistance programs and demonstrating return on investment for the employer.