Features

Published February 2010

Does Employee Education Build Loyalty?

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.

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Best Practices for Maximizing Tuition Assistance Plans

E. Faith Ivery

Tuition assistance plans (TAPs) can increase employee retention, but only when aligned with the talent needs of a company.

Click to read more

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