Could Free College Tuition Help Fiat-Chrysler Keep Its Employees?
In a rather unexpected move, Fiat-Chrysler Automobiles (or FCA) plans to offer free college tuition to all of the 118,000 employees at its Chrysler, Jeep, Dodge, Ram, and Fiat dealerships in the hopes of “attracting and retaining the right kind of talent.” Free tuition for dealership employees would be an industry first, and the program is designed to cover 100% of a student’s tuition, fees, and books up front, alleviating any financial burden that would normally placed upon an individual.While this may sound like a fantastic option for anyone looking to pursue a higher level of education, we can’t help but wonder if this tactic will indeed help a dealership retain its workforce in the long term, or if it will only attract a few committed souls.
According to the report in Fortune, “dealership showrooms experience annual turnover between 45-60%” and that selling cars is “a tough job” according to Al Gardner, vice president of dealer network development and president and CEO of the Chrysler brand at FCA US. Gardner went on to say that conversations with various dealers led him to realize that “Their largest issue is how to attract the right talent to take customer service to the next level.”
Apparently, FCA has opted to follow in Starbucks’s footsteps by offering free education to anyone who wants it, with the only difference being that FCA will cover an employee’s tuition in advance. Gardner points out that the company has opted for this approach because “It’s vitally important that we don’t ask these employees to put a cash outlay and then wait 90 or 180 days for reimbursement. Many of them couldn’t afford that.”
This means that any part-time or full-time employee who has been at a dealership for more than 30 days is going to be eligible for an associate, bachelor, or masters’ degree program at Strayer University, a 123-year-old for-profit college based in Virginia. With 40 degree categories available to choose from, employees will soon be able to take classes either online or at one of Strayer’s 77 campuses. This unique program will first be introduced to 356 Southern dealerships in Florida, Georgia, South and North Carolina, Alabama, and Tennessee to serve as a “proving ground” for the program as a whole. Once it is confirmed as a success, FCA plans to expand the program to its 2,400 American dealerships before the end of the year.
Impressively, the program covers all school expenses just as long as a dealership agrees to pay a flat fee to cover their part of the program. While this fee amount has not been disclosed yet, we doubt it will be very sizable if FCA wants to see this program succeed. Karl McDonnell, president and CEO of Strayer Education, reportedly tells Fortune that a bachelor’s degree at Strayer typically costs $42,000 when excluding books and supplies.
“Strayer and FCA first connected when the auto company asked the university for input on its internal training programs,” Fortune said in its report. After some negotiations, FCA opted to join forces with Strayer since it offers “accreditation, national reach, expertise in adult learning, and flexible academic offerings.”
Mark Ward, vice president of tuition assistance advisor EdAssist, says that “in the last 12 months, as the labor market has tightened, more companies are interested in offering employees tuition assistance” and that “employers are realizing that the benefit is considered especially valuable by a growing segment of the workforce: millennials.” A survey last month by EdAssist revealed that if millennials are asked to choose between similar jobs, “nearly 60% of respondents would pick the job with strong potential for professional development over one with regular pay raises.” The study also found that half of millennials said that they “expected an employer’s financial support in paying for further education.”
Will this pricey project pay off for the Fiat-Chrysler? Fortune says that “employees who participate in tuition assistance programs are often developing skills that are directly related to their jobs,” and while this is a good sign overall, the program is still quite a long ways away from producing results. FCA stands to lose a lot of money if this plan doesn’t work in the company’s advantage; there also is the issue with students not finishing school, and the financial strain that could place on both dealership and corporate branch alike. As a former car salesman, I know that a typical workday lasts between 10-12 hours, leaving little room for studying once the day is done.