Fiat Chrysler Automobiles Inc. revs the engine on college tuition programs by offering 118,000 dealership employees tuition up front.
by Kate Everson
September 23, 2015
In the 1930s, Chrysler Co. was known as the “engineering company” of Detroit. It got this label by introducing several innovations to vehicle manufacturing — replaceable oil filters, downdraft carburetors and one-piece curved windshields, to name a few.
Nine decades later, Fiat Chrysler Automobiles Inc. works to live up to its early reputation not just through the products it puts on the road but also in its approach to employee development.
In April, the car company announced its Degrees at Work program, which pays college tuition and expenses upfront for its 118,000 dealership employees in the United States. Participants must work for the company for 30 days and attend Strayer University. Other than that, there are no limitations on who can take part in the program or requirements for employees to stay on past graduation.
“The brand is only as good as the people who sell it and work on it day in and day out, and talk and meet the customers,” said Al Gardner, president and CEO of Chrysler Brand and head of networks and dealers development for FCA US. “If we’re not incredibly represented at the dealership level, we will lose connection between the brand and the customer.”
Turn Over Engines, Not Employees
Chrysler has its reputation to uphold as well as a streak of success to continue. This year it celebrated 61 straight months of year-over-year growth — a major achievement in the U.S. automotive industry.
Gardner credits the company’s dealerships with this growth, which is why he and John Fox, director of dealer training at the FCA Performance Institute, put together the tuition program. Part of it is a thank you to the employers who sell FCA’s cars. It’s also a way to keep the company on the road to steady, large-scale growth.
Learning has always been a part of FCA’s executive structure. As CEO of the Chrysler brand, Gardner works with 23 other executives, including the CEOs of FCA’s five other brands: Dodge, Ram, Jeep, Fiat and Alfa Romeo. Every brand executive has double duty. For example, the Dodge CEO also runs FCA’s commercial fleet function. Because Gardner’s job also includes overseeing the 320 people who run dealer training and education, anytime other executives need to work with the Chrysler leader, they simultaneously collaborate with the company’s learning leader.
“You put all of these people in a room, and they are all incredibly dependent,” Gardner said. “Development becomes a pinnacle pillar of what they need to do moving forward.”
Tuition assistance wasn’t the original plan, however. Gardner and Fox first connected with Strayer University to close gaps in FCA’s curriculum so they could help employees improve the customer experience. In 2014, they approached Chrysler’s National Dealer Council — 24 dealers representing approximately 2,600 others across the country — and asked what they needed most from the organization’s learning function. The answer: A plan that would allow dealers to hire the best people, develop the talent they already had and retain the best employees.
“The automotive industry is a tough industry,” Fox said. “There are long hours. It’s tough work, and a lot of people have a negative perception when they walk into a dealership. Trying to find the right people to help us change that mentality and perception is critical to us.”
According to Gardner, more than half of dealership employees turn over each year by moving to a different position in the organization, changing franchises or leaving the industry entirely. That’s why one of his greatest challenges was creating a program that kept these employees engaged and on the showroom floor.
A year later, Degrees at Work was born. Dealer owners pay a single fee to FCA to send as many employees as they want through Strayer University. Students can attend classes at one of Strayer’s 77 facilities or complete coursework online.
If the program functions the way its creators intended, it will facilitate both retention and recruitment. Employees must work for FCA’s dealerships to get tuition, which means they’ll probably stick around for a few years until they complete their degree.
The program could give FCA a competitive edge in recruiting, too. “If you’re selling Hondas right now, you don’t have a college degree, and you realize the Chrysler dealership in your town is offering a free college education, you’re going to consider joining Chrysler,” said Karl McDonnell, CEO of Strayer Education Inc.
The education itself also will improve FCA’s functions. No matter what major they choose from Strayer’s 40-plus business- and management-based degree programs, employees will receive curriculum focused on the auto industry. For example, that might include case studies about automotive companies rather than fast-food or retail corporations. This ties the curriculum into their day-to-day work.
McDonnell said similar approaches have resulted in turnover decreasing by half in other companies, and he expects FCA will experience the same. “It’s a chance to tailor and further contextualize that learning, which is even more of a win-win,” he said. “Chrysler will see a boost in performance because people are trained to their business, not just because of a boost in retention.”
Reaping the benefits of a tuition program like Degrees at Work requires more than signing a check. Joshua Ostrega, chief operations officer and co-founder of HR technology company WorkJam, said one of the biggest barriers is being able to balance school with professional and personal obligations.
“People who are in school right now, even working at the companies that are talking about these paid tuition programs, are having an extremely hard time making ends meet because of the hours they have to work,” he said.
Ostrega’s company builds apps that aim to streamline scheduling, recruitment, performance reviews and workplace communication, which he said can help workers lead the double life of employee and student. But at the end of the day, the human factor is the key in the ignition — it’s what runs the technology and drives the face-to-face interactions that promote a company’s workforce development approach.
“Managers have to have the intention to help improve workers’ general life,” Ostrega said. “It has to be about building the human factor and relationships between employer and employee so their goals are more aligned.”
Degrees at Work doesn’t neglect this. In addition to paying for books and tuition upfront, the program assigns participants advisers to help employees juggle the different demands on their time. Strayer calls these advisers “success coaches.” McConnell said they provide best practices for studying, facilitate tutoring, and act as a sounding board for whatever problems — professional, educational, personal — an individual may have.
Because the program was just adopted, there’s no concrete way to tell how it has affected FCA’s employees or, by extension, its bottom line. But Gardner said the initiative aligns with the company’s vision for the future. “We look at the volume [of company growth]we have planned between now and 2018, and we realize we’ll only get there if they grow with us,” he said.
Learners, Start Your Engines
When Degrees at Work was announced in May 2015, it drew comparisons to Starbucks Corp.’s College Achievement Plan, which reimburses all employees’ tuition if they pursue an online degree from Arizona State University.
But Gardner said the tuition programs are quite different. Rather than require employees to pay upfront and wait for reimbursement, FCA signs the check from the starting flag.“Employees don’t always have the cash upfront,” he said. “If we could take the cash out of the equation, then it is a true win-win. It’s a no-brainer: ‘I’ve always wanted to get a degree, and you’re effectively funding it for me with zero debt.’ ”
Although some companies have done it this way, FCA’s sizable employee base makes the program an outlier. McDonnell said the only challenge he sees on Strayer’s side would occur if all 118,000 employees took advantage because of the constraints it would put on university staff. However, his data suggests that likely won’t be an issue.
In May, Starbucks reported of its 182,000-strong workforce, 1,800 employees had applied to join the 2,200 already enrolled in the College Achievement Plan, which launched in 2014 — right in the middle of the planning process for Degrees at Work, which launches nationwide after press date. Currently, a pilot program has been rolled out in the Southeast Region.
“It’s the future,” Gardner said. “Employers have to take on an active role in higher education and preparing the workforce of the 21st century. I suspect other companies will follow suit.”