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Gym memberships. On-site cafés. Sleeping pods, even. Workplace incentives are nothing new. FCA US, maker of Chrysler vehicles, includes free college degrees among its employee perks. The Degrees@Work incentive links employees with Strayer University for the on-campus or online pursuit of a degree. Eligible employees could earn their associate's, bachelor’s, or master’s degrees.
It’s intended to promote dealership employee retention – but could it embolden a portion of the workforce to grab the opportunity and go elsewhere?
FCA US and Strayer officials believe skill development will yield tangible results quickly in the store. The carmaker hopes the program will grow employees qualified for hard-to-fill positions from within. An employee’s prospects can also grow outside the dealership with a college degree.
Education to stem the turnover tide
A debt-free opportunity to earn a degree could entice prospects to FCA US, they hope. Degree offerings include accounting, business administration, and information systems, areas of study that could benefit dealers in the short- and long term.
After a phase-one launch in the southeastern U.S., the program will go national by the end of 2015.
Retention remains a sore point for car sellers. A National Automobile Dealers Association study revealed a 66% turnover rate for sales consultants in 2013, up four points from the year before. FCA US ranks ahead of that trend at about 50% turnover. The private sector rate is 42%, according to Auto News.
Ted Kraybill is president of ESI Trends, which provides studies, surveys, and strategies in automotive retail. He estimates that of the 66% turnover, 40% last fewer than 90 days. Can the free college education help employees feel more invested in the companies that invest in them?
What happens after graduation?
The addition of continuing education provides an opportunity to boost value. Could the combination of in-house development and educational opportunities create an environment that encourages employee loyalty? Programs already exist to advance employees’ core competencies.
Employees who earn degrees they didn’t have when they began their job theoretically qualify for higher-demand, higher-qualification, and higher-paying jobs.
Incentives such as this one between FCA US and Strayer address that dwindling pool. Education and training for the existing workforce carry an additional cost, though. Neither FCA US nor Strayer would disclose the monthly flat fee the car maker would pay to maintain this program.
Also undisclosed was whether FCU US has a provision in place that requires employees remain with the company for a predetermined time after they earn their degrees. The acquisition of a degree both boosts an employee’s value in the workplace and bargaining power in an open marketplace.
The difference remains to be seen. FCA US’ success might hinge on its ability to provide competitive and enticing opportunities for the employees it helped advance their careers in the first place.
Sources:
http://www.esitrends.com/about-us/
http://www.investopedia.com/articles/economics/09/education-training-advantages.asp
