We forgot about the labor shortage, didn't we? The economic downturn made it easy, once again, to have strong-skilled, qualified people line up for job openings. But like a nagging headache ready to birth a migraine, the labor shortage is still with us, masked by the slower economy of the past several years. Have your headache medication handy when job creation really gets rolling again. A recent study by the National Association of Software and Service Companies estimated that, because of our aging population, America faces a labor shortage of 5.6 million workers in 2010.
Remember those boom times, when businesses lost their best people as they were hired away for more money, and those who replaced them had fewer skills and needed costly training?
With one small shift, with one budget line-item change, you can stoke the fires of employee loyalty and avoid losing them. Take the budget you have set aside to train new employees, and shift a healthy portion into training the employees you already have.
Over and over again, studies find that one of the best things employers can do is encourage their workers to stay current in their professions. This often means going back to school for a higher degree. In a new national study of 6,000 working adults, 49 percent said their employers offered tuition assistance. Utah employers have a very generous track record. At the University of Phoenix in Utah, nearly 65 percent of our students receive some form of tuition reimbursement. Many tell us they get promotions, even raises, just as they graduate. At BYU, while the level of reimbursement is not tracked, Carri Jenkins of university communications said, "We are grateful to Utah employers who assist employees with their educational pursuits. Not only will this benefit the employee but also the company or institution where they work."
Last December, when Fortune Magazine named the "100 Best Places to Work for in America," all of the top 100 spent more than $414 million on tuition for employees, an average of $4.1 million per company. Allstate, Verizon and Prudential Financial, who all made the list, offer tuition assistance. Verizon offers the benefit to employees on their first day of work. Prudential even gives paid time off to employees who are taking college exams. Locally, companies like Discover, Questar, Detroit Diesel, Parker Hannifin, GE Medical and many more have realized the value of re-educating their employees.
The ability to afford a higher education is poised to become the issue of the decade. Potential students are frightened that the doors to a better life are slamming shut. At a July Salt Lake Rotary Club luncheon, Richard Kendell, Utah's commissioner of higher education, said that Utah's history of being a low-tuition, low-financial aid state is changing. "We are now becoming a rather high-tuition state," said Kendell. He went on to explain that for a number of years Utah's public university students have paid only 27 percent of the cost of their public college education. In 2004-05, they will pay 36 percent.
A total of 170,000 qualified students will not be able to afford to attend a university or community college this year, according to a U.S. Department of Education advisory panel. And an August 2004 Wall Street Journal article said economists estimate that each time tuition increases by $1,000, the number of 18- to 24 year-olds who go to college drops by as much as four percentage points.
Government need not, should not bear this problem alone. The private sector has an interest in keeping the workforce educated. Where brainpower exists, businesses thrive. Where employees feel cherished and appreciated through benefits like tuition assistance, they are much less likely to look for greener grass.
If you have a tuition assistance program, the local economy thanks you. If not, do consider one. You can make a golden contribution to the quality of Utah's lifestyle, and in return, build the loyalty and talents of your employees.
N. Darris Howe is the vice president and director of Utah's University of Phoenix campus.