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Would You Like A Coffee With That College Education?

As families’ education costs skyrocket and the need for skilled workers keeps business owners up at night, a new model for workforce training has just hit the streets. Starbucks is providing a free college education to thousands of its employees through an online partnership with Arizona State University. Open to all of Starbuck’s U.S. employees who work 20 hours a week or more, Starbucks will pay full tuition for those employees who have the grades and test scores to gain admission to Arizona State. For a fast-food company, Starbucks’ has really broken the mold in terms of employee attraction and retention: they offer health insurance even for part-time employees as well as employee stock options. Yet, with all these benefit costs, Starbucks’ stock has grown more than one hundred fold since 1992 when it went public. And according to the book, The Starbucks Experience, Starbucks’ employee turnover is 120 percent less than the industry average.

For many small business owners, including small manufacturers, additional spending on employees’ wages and benefits seems counter-intuitive to financial growth. But in an era where the competition for a skilled workforce accelerates every day, a little more spending could, instead, reap a lot more in profitability.

Bassi Investments Inc, a money management firm headed by economist Dr. Laurie Bassi, invests in companies that invest in their people. Bassi Investments develop portfolios of firms that make significant investments in human capital management, and the investments’ above average market returns demonstrate that in order to make money, businesses must now acknowledge the importance of their workforce to the success of that business.

Among the MEP network of Centers, MANTEC, in Pennsylvania, has provided dedicated Human Resources Services since 2000. Their workforce service offerings are market-driven because their small manufacturers (<100 employees) generally have no human resource staff. Yet, HR services are the second most frequent request among their clients.

So, if you are not a Starbucks, what can you do to keep your good workers on board? In many cases, opportunities for greater participation in business decisions, employee stock ownership plans (ESOP) and internal career mobility are a good start. Pay-for-performance and wage increases attached to skill increases can also be effective in reducing turnover.

The old saw of “why train, when they’ll just leave” no longer cuts. Once you’ve spent good money on recruiting why wouldn’t you want to support that investment and make sure you get the continued benefit of an ever-smarter workforce?   When you learn how much a small investment in people can pay off for your business, the only thing that will keep you awake at night will be that afternoon cup of coffee.

About the author

Stacey Wagner

Guest blogger Stacey Jarrett Wagner has more than 20 years of experience in workforce development, conducting research and providing strategic thinking and technical assistance on workforce development issues.

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Great blog post Stacey. It reminded me of a Baldrige organization whose CEO said, on the subject of why he invests so much into training staff who could just leave, "what if we don't train them and they stay."
Good article. Companies can also help their employees by providing a thought-process path that helps the employees understand their own expectations for additional education and then focus them on achieving those goals in a way that is most affordable and compatible with the employee's expectation and life style. For example, if an employee wants to further their education for career purposes, then it is important to understand the employee's natural work inclinations/desires/intentions and cognitive abilities and how those do or do not fit into attractive job/career opportunities (an employee may be in love with French literature in the 13th century, but don't expect to earn a living with an education built around that discipline). Alternatively, if an employee wants a liberal education foundation so that they can be a knowledgeable and effective citizen while pursuing a career as an auto/diesel mechanic, then they can get that education -- for free -- online from very good institutions (assuming they have the self-discipline to stick with classes when no one is prodding them). This might be an area in which NIST MEP can help the various state organizations help their clients.
Great article Stacey Employees don't just leave because of pay or benefits they leave because of management. Employees will stay for a good leader because that leader helps drive their growth. When employees are engaged by their superiors they stay for the opportunity of a great leader. Lets focus on building great leaders not just good employees. Yes they may leave some day but lets get the best they can do while they are there, because the return is not just in the performance its in the impact on the business. Customers sales etc.

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