Workforce solution? Tuition help for workers that actually helps

October 21, 2018

Crain’s Detroit

By: Chad Livengood

With employers scrambling to find new workers with the right talents and skills to fill critical jobs, perhaps they’re already under the companies’ roofs.

Many companies offer tuition assistance or reimbursement programs for employees to go back to school and earn a certificate or degree or just to take certain courses to hone skills the employer needs.

But there’s a big barrier for employees to enroll in college courses: the upfront cost.

For example, a single three-credit-hour graduate class at Wayne State University costs $2,100. At Oakland University, taking junior-level courses part time (nine credit hours) to finish a bachelor’s degree costs nearly $4,500. Per semester.

Credit card giant Discover Financial Services Inc. found the upfront cost caused lower-level call center employees to drop their higher-education ambitions because they simply couldn’t afford to front the cost of tuition, books and fees — and then wait months for reimbursement.

“That’s an enormous cash-flow problem,” said Jon Kaplan, chief learning officer for Discover Financial Services.

At an employee town hall meeting in June, the Riverwoods, Ill.-based credit card company announced a change in its tuition reimbursement benefit to a tuition remission where the company pays three universities directly for their employees’ tuition, books, fees and any taxes if the benefits exceed the $5,250 federal limit for educational reimbursements.

“There was an audible gasp from the audience when we rolled it out,” Kaplan said Tuesday during a discussion at a Detroit Regional Chamber breakfast meeting at the Detroit Athletic Club.

Kaplan was making a case to business leaders in attendance that they should rethink their tuition reimbursement programs as one solution to addressing the talent gap.

“We think it’s going to be a very minimal expense to get 1,000 people every year enrolled in college,” Kaplan said.

There’s some evidence that tuition reimbursement programs do have a return on investment for employers. The Lumina Foundation studied Cigna Corp.’s tuition reimbursement program between 2012 and 2014 and found it had a 129 percent ROI for the global healthcare services company through fewer turnovers and staying with the company longer, cutting down on HR management costs.

Employees who used Cigna’s tuition benefit also saw their wages grow by 43 percent after they attained new skills and got promotions within the company, according to the Lumina study.

For switching to tuition remission model, there are some mechanics that each employer has to work out, Kaplan said.

Discover hired for-profit firm Guild Education to manage its tuition remission program and negotiate lower tuition charges with the three partnering universities — economies of scale that an individual employee couldn’t achieve on his or her own.

The credit card company requires each employee enrolled in its Discover College Commitment to fill out the Free Application for Federal Student Aid (FAFSA), which can reduce the tuition bill, depending on what aid they qualify for.

Discover also is no longer policing its employees’ grades like it used to. Under its old tuition-reimbursement program, if an employee failed a college course they’d already been reimbursed for, they had to repay the company for the cost, Kaplan said.

“We actually found that our employees would quit,” Kaplan said. “They’d rather run than try to pay that back.” Under the new remission program, the company stops paying the tuition bill if an employee’s grades slip.

“We’ll pay for that D, we’ll pay for an F,” Kaplan said. “But you may not be able to get back into the program if you don’t increase your grades.”

And Discover Financial isn’t paying for degrees in poetry or Latin. The company has tailored its tuition remission benefit to seven specific degrees in fields that would benefit the company.

Discover company officials are trying to build loyalty in its existing lower-skilled workforce while getting them trained for jobs that require more skills.

It’s an interesting approach compared with the frantic hunt underway in most human resources departments right now for talent.

And for big businesses like Discover, it’s a new approach to tackling the talent crisis without waiting for some outside force — such as politicians — to fix the educational pipeline that more and more companies are finding to be broken.

“If you start investing in your frontline workers, it’s like putting chips on the table all over the place — you’re getting a lot of return for that,” Kaplan said. “It’s an easier way to build talent.”

 

View the original article here

Urban Mobility Solutions Are Reliant on a Willingness to Share

Connecting people with efficient transportation options is essential to remaining competitive as a region. As part of the “Urban Mobility Solutions: Innovating Transportationpanel, leading mobility experts shared insight on Detroit’s efforts to transform into a more transportation-friendly city.

“It is in our DNA here (in Detroit) that everyone gets in their own car and drive,” said Mark de la Vergne, chief of mobility innovation for the city of Detroit. “Yet the concept of sharing is gaining traction and that is a good thing for everyone needing mobility.”

32826897850_c79780bc4f_o

Key takeaways:

  • Bike-sharing, like car-sharing, works in urban environments.
  • The Regional Transit Authority is critical to Detroit’s resurgence as it can unify the region.
  • Mobility companies must work collaboratively to promote Michigan’s world-class research and development assets.
  • Lyft is working to create a friendly service for the tech-challenged market.
  • Detroit must make safe, reliable transit options easier to access.
  • There must be a continuous attempt to strengthen public and private sector relationships to help improve mobility.
  • Autonomous technology brings a new sector of business to mobility that benefits everyone.

Panelists also included: Elliot Darvick, general manager of Lyft Detroit; and Lisa Nuszkowski, founder and executive director of Detroit Bike Share. The panel was moderated by Crain’s Detroit Business senior reporter Chad Livengood.

Read more from the 2017 Detroit Policy Conference:

Workforce Experts: More Talent Needed to Fill Skilled Trades Gap