The MBA sponsorship program at Deloitte impressed Jason Halupnick when he took a job there in 2001. As long as he earned strong performance reviews, he could eventually apply for an expenses-paid degree, courtesy of the firm, at a school of his choice.
But when his turn to apply came in 2003, he says, the process had become more stressful: Unlike prior applicants, he was required to make a formal pitch about the investment potential of his education before a panel of Deloitte's partners.
"The process was parallel to that of actually applying to grad school," he says.
Today's working MBA hopefuls are facing more rigorous selection criteria and tougher odds than the generation before them when it comes to getting an employer to pay their way through school. Research suggests employers have found new ways to make the most of their graduate tuition investments, and avoid being burned by fickle employees who accept the money and leave anyway.
A growing number of prospective students are without the benefit at all. In 2010, 56 percent of employers offered graduate school assistance, down from 69 percent in 2003, according to annual benefits data collected by the Society for Human Resource Management (SHRM). The group's data show an average steady decline in offerings of about 2 percent a year. For companies with 500 employees or more, 75 percent offered the benefit in 2010, down from 80 percent in 2007.
Meanwhile, use of such programs more than doubled between 1992 and 2007, according to a 2010 joint study by SHRM and the National Association of Independent Colleges and Universities (NAICU), with the biggest boost among employees seeking graduate degrees. Thirty-six percent of employees reporting tuition reimbursements in 2007 said they were pursuing a master's degree, vs. 21 percent in 1992. Business was the top area of study reported in the survey, which included management, accounting, finance, marketing, and business administration degrees.
From their inception, tuition sponsorship programs were expected to improve workers' skill sets and retain talent and foster goodwill, says Colleen Manchester, an assistant professor at the University of Minnesota's Carlson School of Management (Carlson Full-Time MBA Profile), who has written two research papers on the topic.
In 2000, 23 percent of employers offering such programs required graduates to pay back their tuition if they left within a year, according to data from the International Foundation of Employee Benefit Plans. That shot up to 49 percent in 2006. In her research, Manchester concluded that offering tuition assistance alone—without any payback provisions—had only limited success in retaining employees.
There are fewer full sponsorships at business schools now than there ever used to be, says Dave Gent, executive director of the Evening and Weekend MBA program at UC-Berkeley's Haas School of Business (Haas Part-Time MBA Profile).
When the University of Pennsylvania's Wharton School (Wharton Executive MBA Profile) started its executive MBA program in 1975, nearly all candidates had their tuition fully paid by an employer, says Peter Cappelli, a management professor and director of Wharton's Center for Human Resources. Now, less than half the employers agree to pay the full amount, he says.
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