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Employee education has become an integral part
of today’s corporate philosophy (read strategy). Underwriting
tuition fees (partly or fully), for both technical and managerial
courses, is common in most companies which take great pride in being
called “learning organisations”. This is a necessary appellation
if an organisation wants to attract and retain the best talent pool.
It is however imperative to link the money spent on employee education
with career growth and other business needs.
A recent study done in the US by Eduventures,
a Boston based research and consulting company, revealed that corporate
America spent $10 billion in tuition reimbursement. Interestingly,
a leading high-tech company acknowledged that it spent $20 million
per annum on tuition reimbursement, but a subsequent audit revealed
that the actual amount was $50 million.
The pertinent question is—can an organisation
calculate the RoI on employee education? The answer is more complicated
than it appears. “Realisation of RoI comes to the fore because
of the attrition level,” agrees Satyen Parekh, managing director,
Borland India. The RoI calculated for technical skills training
is much easier than managerial or functional responsibility. For
the latter a long-term perspective has to be considered. Parekh,
in fact, believes that an organisation should be able to judge on
whom to invest and whom not to at the recruitment level itself.
“Knowledge can be implemented by training, but inner capabilities
are ingrained—then if you take in a person, no matter what
the training, attrition will remain,” asserts Parekh.
Whom to sponsor?
It is significant for an organisation to analyse
which employee should be selected for continuous training. “Furthermore,
the company should be discerning about the amount of reimbursement.
For instance, if someone wants to do an MBA, then 50 percent of
the fees should be supplemented,” adds Parekh.
Types of initiatives
The main areas of employee education are technical
and managerial streams. An organisation like HCL Comnet trains its
employees worldwide on technical and transition management modules.
The organisation has a technical skills certification reimbursement
policy. SM Arif, vice president—HR, HCL Comnet, says, “Our
culture of learning is built around the popular programme EDGE (Employee
Development, Growth and Empowerment) which aims at making the company
a ‘knowledge driven organisation’—an organisation
where growth is measured not just by profits but also from the synergetic
growth of each employee.” The Top Gun Technology School and
the StarTech School are two skill-upgradation initiatives under
this programme.
Efunds International introduced a formal programme
to sponsor employee education, earlier this year. Dr Pradnya Parasher,
senior director, human resources, eFunds International India, informs,
“The FaCE (Facilitating Continuous Education) scheme was launched
to encourage, support and facilitate associates who are enrolled
in advance or specialised courses to complete their course and to
motivate those interested to take up courses relevant to their work
area.”
While eFunds employees are entitled to a reimbursement
of Rs 50,000 per course, HCL Comnet has committed a minimum of 14
man-days per employee, instead of limiting the amount of money spent.
Intangible returns
Most experts agree that the RoI on employee education
is intangible. Says Dr Parasher, “A happy, satisfied and motivated
associate is the most valuable asset—so that would be the best
return on this investment for us.” Asserting that the benefits
of this investment are difficult to calculate, she adds: “We
are talking of ‘long-term’ and ‘intangible’
benefits or returns. So, from direct and tangible benefits like
longer and more stable tenures, to intangible (and immeasurable)
benefits like employee satisfaction, the impact of an initiative
like this is truly immense.” She acknowledges that while the
actual returns cannot be fully measured, the RoI could perhaps be
estimated in terms of indicators such as longer tenure; promotions
to higher levels of responsibility and cross transfers, and also
the success of employees at these higher levels of responsibility.
Arif adds that the intangible benefits also include high motivation
and commitment levels of employees, improved customer service and
value additions in services.
Win-win scenario
Sponsoring of employee education is a win-win
situation for both the employee and the employer. Dr Parasher explains
how:
- The employee gains by the sponsorship, which
is not just in monetary terms. In most cases the education that
the employee has opted for is in a field related to the work.
Mentoring by some of the best in the industry is an added bonus.
- The organisation also gains significantly.
Benefits include a longer tenure for the employee; promotions
to higher levels of responsibility and cross transfers—both
vertical and lateral movement, and also the success of the employees
at these higher levels of responsibility. Overall development
of associates and increased productivity are the benefits. A motivated
employee more often than not sets off a positive ripple effect
in the organisation. The key takeaway for any organisation is
the contribution towards building human assets and building credibility
for the company.
Focus of training
The focus of education should be a clear and
progressive career map. This is not always easy when hiring is in
large numbers. Parekh concedes that IT organisations hiring people
in hundreds or thousands might find it difficult to form career
graphs for each employee, compared to companies that are hiring
fewer people and can offer a more structured career path. The perspective
has to be in terms of enhancing abilities and creating a passion
in employees that they should not look elsewhere rather than reducing
attrition per se. “More than just creating loyalty, education
should create a fire in their belly,” says Parekh with conviction.
A bad investment?
In an era of constant attrition, does the company
consider it a bad investment when a sponsored employee leaves soon
after completing a course? Answers Parekh, “No company can
be sure that all people being sent for training will continue to
serve the organisation.” He adds that if one out of 10 employees
leaves it is “understandable,” if three leave then there
is a problem, however if four or more leave there is something wrong
with the training programme.
At HCL Comnet while there are no clauses binding
the sponsored employee to the organisation, the former is expected
to share his or her knowledge with other employees. Arif believes
that the company can protect its interest by tying the employee
education programmes with growth opportunities. “Educational
opportunities as a standalone make no sense; they have to be packaged
with a promised growth graph, so that the employee does not look
at short-term gratification but at a longer run,” he insists.
Similarly, eFunds does not have a binding clause, but there is a
qualifying criterion for the FACE scheme.
Apparently, the only way an organisation can
ensure that reimbursing the tuition fee is not a dead investment,
is to be selective in its choice of its employee and the training
being sponsored.
sudipta@expresscomputeronline.com
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