Back to School

John Hunter
Posted: 06/10/2008
Would mandating a corporate university benefit your company?
It has been said that education is an ongoing process—but does it need to continue once one hits the work force? Ever since the 1970s, corporate universities have been a part of the office culture, with companies such as General Electric Inc. and Motorola Inc. taking part. Today, this practice is still common—and growing—among companies.
There are many reasons for businesses to initiate university programs: to shake up an old training program, to introduce a variety of strategies, or to build on an already-successful office culture. Ultimately, the purpose of these universities is for people to gain knowledge and insight into their industries, for companies to retain employees, and for people to foster loyalty to their employers.
Workers are often mandated to take industry-specific classes, which can range from a workshop to longer, more traditional classes. In 1993, only 400 U.S. companies offered
corporate universities. In 2001, there were 2,000 companies with these programs. By 2010, the number of corporate universities in this country is expected to be 3,700. However, setting up a corporate university can be extremely costly, and might not benefit every business. Would such a program be valuable for your company? We weigh some of the pros and cons of corporate universities.
Positive Aspects of Corporate Universities
Corporate universities, in theory, provide many benefits to both the employee and the employer. The worker is encouraged to continue his or her education. In fact, according to The Technology Source, 16 percent of corporate universities partner with traditional schools for joint degree programs. And since the skills learned are directly applicable to the company, the person becomes even more valuable to the company. In terms of employee retention, those who are sent to corporate universities tend to become intensely loyal to their companies because they have been given additional understanding of how the company works, show great team spirit, and really feel a sense of belonging and therefore are more likely to feel satisfaction with the job.
The company also benefits from sending employees to the training sessions. The classes are often geared to improve the skills of the managers of the companies. Students at corporate universities can participate in research, which can provide valuable information for the companies, in addition to giving the students "real world" experiences. The knowledge gained in the classrooms helps the employee have a better understanding of the company and the job, which yields a more efficient workplace.
According to researchandmarkets.com, corporate universities have been successful, and therefore company budgets nationwide have increased to accommodate these programs. In addition, this trend has spread outside of the country. In the past, corporate universities were only located in North America; now, however, these classrooms can be found in Europe, Asia, and other parts of the world.
Negative Aspects of Corporate Universities
If the corporate university is introduced correctly, with a clear strategy and goal in place, it can be an effective tool for workers. However, if the plan is unclear and there is confusion, then the corporate university might become just another method of training employees instead of a way to introduce novel ideas and initiatives. It is also vital to ascertain who the leaders of the university will report to. Often traditional training is considered part of the human resource domain. However, it must be established as to whether the leaders of the university will report to the CEO or COO of the company, which would promote higher visibility for the company. This must be made clear well in advance of sending employees to the university. If not, the focus of the training sessions will be lost.
Another factor to consider is where to hold the actual classes. Although some corporate universities are found in traditional buildings, often classrooms are virtual. Employees who are used to a weekend getaway at a seminar might find difficulty managing Internet-based classrooms or learning without face-to-face instruction.
And, of course, costs are important aspects to think about. In this country alone, over $100 billion is spent annually on corporate universities. Because of this, the return of investment (ROI) is often part of the evaluation of the effectiveness. The ROI must take into account the costs versus the benefits of the training.
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John Hunter
Posted: 06/10/2008

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