Published on 2012/09/21

Limited Institutional Resources Wasted on the Corporate Market

For higher education institutions, investing staff and limited resources into professional training and development is simply not worthwhile given the lack of overall demand and the differences in employers’ priorities.

From the perspective of the corporate market, employers provide educational benefits to recruit and retain a talented workforce (as well as to obtain tax benefits), so the educational programming must serve the interests of the corporation. The individual, on the other hand, pursues education for personal enrichment and professional opportunity and advancement, which may or may not serve the interests of one’s current employer. From the perspective of the educational provider, recruitment at businesses is a problematic investment of enrollment management resources for a number of reasons identified below.

Outreach to the corporate market includes the presentation of both baccalaureate and graduate programs, which represent different employee ranks. The distinctions between undergraduate and graduate learning populations are that the former are often entry-level, clerical, low-level administrators, or individuals with technical training and expertise. In contrast, employees seeking graduate-level programs and credentials are seeking to specialize in a particular discipline and field and either move to a new profession or advance within their current one.

Outreach to corporations, to provide existing or custom-designed programs, is focused on the knowledge and competencies identified by the employer that will advance its business. By tailoring programs to a particular corporation, the investment made is to a narrow target that may have little or no relevance to any other employer or industry. An educational provider must assure that custom programs can be relevant to enough audiences to make the investment of curricular design and faculty resources worthwhile. Moreover, custom designed programs allow the employer to have sway over content. This dynamic changes the foundation of the mission of higher education which is to stand outside other institutions and entities and push the boundaries of knowledge. Colleges and universities must be mindful of the line between inviting industry input about emerging needs, skills and competencies, and workshops for employee skill development that serve a particular company’s purposes.

From the perspective of the educational provider, recruitment at businesses is a problematic investment of enrollment management resources for the following reasons:

1. Demand Is Not High Enough

Current enrollments of students using employer tuition benefits are a strong indicator of future enrollment trends. The highest numbers of students who use these benefits are from the institution itself, those using their employee benefit, or those from a close partner (such as an affiliated hospital system). The remainder tends to be one student, or very few students, from dozens of different businesses or organizations. Therefore, it is futile to invest monetary and staff resources to recruit at dozens of organizations that do not present demand.

If optimally successful recruitment efforts expect application-to-admit conversion rates of 50 percent, and admit to enrolled rates of 25 percent, a pool of 100 applicants would yield 12.5 FTE’s. In the best case scenarios, corporate recruiting events often yield one to 20 prospective students, thus, even if the attendees fit the profile of the target learner and have the required qualifications, the possible yield is barely one to three students. The applicant pools at most organizations are small and the yield of admit-to-enrolled is not significant enough to justify the investment.

2. There’s Little Support from Employers

Most employers allow the benefits to be used at any accredited institution, so they are not inclined to drive their employees to a particular school or program, especially because they cannot control or guarantee admission. Employers may permit recruitment activities on their premises, but they are not inclined to endorse particular schools or programs.

Employer benefits are set at fixed amounts and the decision about how and where to use the amount allotted to the employee is his/her choice. For example, the cost variance among private and public educational providers is significant; therefore, employers cannot advocate or promote a school or program because the value must be determined by the individual.

3. Employers Look at Cost over Quality

Some employers approve courses and programs that employees can pursue, placing greater restrictions on the employee’s options. Further, most employers apply a grade minimum for reimbursement, thus employees may choose the most cost effective options to minimize their own financial risk.

The best strategy outside general marketing to a student population and program-specific marketing is a broader focus on industries as opposed to specific corporations. Workforce investment boards and councils address needs across sectors and present the opportunity to build relationships and to collaborate on emerging needs in fields. This approach transcends the corporate market and also extends to government and nonprofit organizations, taking into view the social and economic needs of a region.

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Readers Comments

Belinda Chang 2012/09/21 at 10:39 am

I disagree with you throughout, here. I think the recession absolutely had an impact on demand for corporate, ongoing learning but as we recover employers are starting to see that they can save money by advancing their own employees as opposed to hiring in management-level employees from outside the company.

Corporations are becoming more insular in the recovery economy (which explains the huge abundance of management-level individuals who remain unemployed) and, in such a situation, corporations must ensure their employees are well-educated enough to be able to continue contributing to their company’s success.

Quincy Adams 2012/09/21 at 10:45 pm

I am actually on-side with Kelly with this piece. It may not be a popular opinion in entrepreneurial, revenue-driven continuing education circles, but I think it’s one we need to pay a lot of attention to.

If a program does not have much re-play value, is difficult to sell and is relevant for a very small percentage of students (prospective or current), would you run that program?

This is effectively a description of corporate training programming. If you have the resources to run it, and you are a leader in the field, great. But I don’t know if it’s a great option for everyone.

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