Tuition reimbursement for higher education is a waste of money if employees can’t use their new skills.
By Sarah Fister Gale
I

f you think your company doesn’t have an MBA sponsorship program, you might want to look again. While many large organizations don’t have a formal policy in place, when local leaders identify high performers interested in continuing education, they often just make it happen.

That can be a good thing and a bad thing, said Daniel Szpiro, dean of the school of professional programs at Marist College in Poughkeepsie, New York. “In these cases, the ultimate decision-makers are people who are closest to that employee, and who understand their potential better than someone in a corporate learning and development office.” However, when these sponsorships occur ad hoc, companies have no way to track the return on investment or to set goals for how the company will benefit from providing this expensive piece of education.

Tuition reimbursement for higher education is a waste of money if employees can’t use their new skills.
By Sarah Fister Gale
I

f you think your company doesn’t have an MBA sponsorship program, you might want to look again. While many large organizations don’t have a formal policy in place, when local leaders identify high performers interested in continuing education, they often just make it happen.

That can be a good thing and a bad thing, said Daniel Szpiro, dean of the school of professional programs at Marist College in Poughkeepsie, New York. “In these cases, the ultimate decision-makers are people who are closest to that employee, and who understand their potential better than someone in a corporate learning and development office.” However, when these sponsorships occur ad hoc, companies have no way to track the return on investment or to set goals for how the company will benefit from providing this expensive piece of education.

This is a common problem, even in companies that do have a formal MBA sponsorship program, Szpiro said. Companies treat MBA sponsorship as a benefit rather than an investment, which means they fail to think about what the employee — and the company — will do with that asset once it is attained. “You would never invest $100,000 in a piece of equipment without having a plan for how it will benefit the business,” he said.

When companies fail to leverage an employee’s new MBA skills through promotion, advancements or leadership opportunities, that investment is wasted and those employees will get frustrated, said Michael Desiderio, executive director for the Executive MBA Council. “If there is no path forward, that’s a problem.”

‘You Don’t Need Those Skills’

This was the case for Alan Thompson, global sales manager for Bird.i in Stirling, Scotland, a start-up that curates satellite imagery for business applications. Thompson became interested in higher education later in life. He dropped out of school at 16 and worked full time in the financial industry for years before launching his own wealth management company in 2015. That’s when he realized he needed more business training.

His partner at the time had gotten an MBA a decade prior. “He said it was the most valuable thing he had ever done,” Thompson said. So when Thompson discovered his work experience qualified him for an executive MBA program at Edinburgh Napier University, he signed up and covered the cost himself. “It was fantastic,” he said. “It opened my eyes to new ideas and taught me to ask the right questions.” It also changed his career focus from trying to make the most money possible to finding opportunities to use his skills to have an impact.

Companies treat MBA sponsorship as a benefit rather than an investment.

Before completing the program, Thompson sold his business and got a job as a manager at Prudential U.K., leading a sales team in a newly created region. Prudential didn’t offer tuition reimbursement, but Thompson continued the program, completing it a year later. That’s when he realized his new skills didn’t align with his current job. “I had gotten all of this new knowledge and value from the MBA, but the business didn’t recognize the value,” he said. His manager wouldn’t give him any new responsibilities and wouldn’t help him find a more senior position in the company. So he quit and took the job at Bird.i. “I would have stayed if they had given me an opportunity to showcase my new abilities, but they wouldn’t,” he said. “I had to move to contribute.”

It’s a common problem for companies that don’t have a formal strategy for what to do with employees once they complete MBA programs. “People develop these new skills and a new way of looking at their work, but their managers tell them, ‘you don’t need those skills,’ ” Thompson said.

Thompson admits his timing might have been off, but even in companies that do offer tuition assistance, such planning is essential to keeping MBAs engaged and employed. “The MBA is not just about getting the credential,” Desiderio said. “You have to map a path forward together.”

Otherwise employees will quit — reinforcing the false notion that companies shouldn’t pay for higher education, because employees will just leave once they get it. “Employers are the ones perpetuating the problem,” Szpiro said.

Ambition and Business

To generate the most value from MBA investments, companies need to change the way they think about the value of higher education to employees and the company, said Nicole Rogers, talent strategy manager for Accenture in Chicago.

Accenture’s Global Scholars program covers the majority of MBA tuition costs and gives employees the chance to work full time on a two-year program away from the office. While it’s a big investment of money and time away, Accenture views these programs as an opportunity for its best people to be advocates for the company within their MBA cohort, and to bring a fresh perspective back to the business. “It introduces diversity of thought and new skills,” Rogers said. “I think that combination is relevant.”

Each candidate in the program is sponsored by their supervisor, who works with the learning and development team to create a long-term plan for their return. Employees also have access to a career counselor throughout the education process, first to help them make the decision to pursue the MBA, then to develop a career plan once they achieve it. “These one-on-one conversations ensure that an employee’s interests and new skills will align with areas where Accenture wants to grow,” Rogers said.

Finding the balance between individual ambition and business need is important, she added. “You want to think about the long-term value an MBA has for your people and for your organization when assessing whether to invest in this kind of program.”

Degrees for All

AT&T has a similar attitude toward higher education. The company supports employees’ pursuit of various degrees, including MBAs. The company has several university partnerships that allow employees to complete MBA programs online while still working full time, reimbursing the full cost of tuition.

“Any employee can get a master’s degree,” said Jason Oliver, vice president of AT&T University Operations in Dallas. “As long as they have the support of their supervisor and a performance development plan, we are in.”

These investments are part of AT&T’s ongoing reskilling efforts to prepare employees for the future of work. While many employees pursue technical degrees, Oliver believes MBAs are just as relevant. “You can always acquire new technical skills, but we also need strong leaders who understand global markets and how to lead in this business environment.”

To ensure employees are successful in their academic pursuits, supervisors meet with them every semester as part of the tuition reimbursement process to discuss their progress and to have personal development discussions. Employees can also keep their internal employee profile updated on competencies they’ve acquired, courses they’ve completed and credentials they’ve achieved. This ensures hiring managers across the organization are aware of their training when vetting internal candidates. “It’s all part of our talent development ecosystem,” Oliver said.

Hamed Pakravan, an AT&T scrum master, is in the midst of completing his online MBA through a program at North Carolina A&T, one of the organization’s university partners. Pakravan’s background is in technology and program management, but he aspires to leadership roles. “My focus is on improving business processes, so when I heard about the MBA program I jumped on it immediately.”

While the online program doesn’t offer the face-to-face opportunities that an on-campus MBA provides, he’s found it to be surprisingly collaborative. “There are a lot of group meetings and peer work, and the technology makes it effortless,” he said. He discovered two other AT&T employees from other parts of the country in the same program and has made a number of new network connections.

He also appreciates the lack of commute, though he admits that even working from home, it is a big time commitment. Pakravan spends two to three hours studying on most weeknights, and another three to five hours on the weekends. “You need to be self-driven to make it work,” he said, noting that even with the full support of his supervisor, “no one is going to tell me to do the work but me.”

A Long-Term Plan

Part of what drives Pakravan is knowing the future opportunities the MBA will afford him. AT&T has a leadership development track for high performers that requires them to have an MBA. Employees accepted into the program spend 18 months doing three rotations in different areas of the business to find where their skills will be the best fit and to identify opportunities for their next career move. Pakravan plans to apply as soon as he completes his MBA.

“A lot of people question the ROI of an MBA,” he said. He agrees that without a career plan linked to the training it’s easy for these new skills to “go into cold storage.” But in a company like AT&T, where leaders actively support ongoing education and show that they value it by creating leadership opportunities for graduates, the training has clear value. “They see the future coming, and they are invested in reskilling their people to fill these roles.”

Finding the balance between individual ambition and business need is important.

AT&T isn’t alone. Almost half of companies (49 percent) offer some graduate education assistance, according to the Society for Human Resource Management’s 2018 “Employee Benefits” survey. Similar data from the Executive MBA Council show that 20 percent of online MBA students received full tuition reimbursement in 2018, and another 34 percent got some of their costs covered.

“Full reimbursement is definitely trending down, but more than half are getting some support,” said Desiderio. However, it’s not enough just to cover costs. “You have to be willing to sit with these individuals, look at their performance development plans and have an honest conversation about their future in the company.”

Desiderio noted that there may be times when an MBA won’t be a good investment for the company if they don’t need or foresee putting that person in a leadership role. But in most cases, it can create new opportunities for succession planning and customizing the skills of the future workforce. “These conversations need to happen earlier in their career planning, and it has to add value for both sides,” Desiderio said.

HR leaders also need to realize that ambitious people will pursue further education — whether you want them to or not. “People want training and the chance to control their own development, but they also need your support,” Desiderio said. If companies want to keep their high performers, figuring out how these advanced degrees can benefit the business may be the best way to meet everyone’s needs.

Sarah Fister Gale is a writer based in Chicago.