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Research of ‘Management Team’ now has proof:
Life long learning; is it worth the effort? Academic research shows a surprising yet unambiguous answer: ‘Yes, it is, always, both for the employer and the employee’.
We love an academic degree. But what for, really? In present times a person aspiring to the top level of a career needs far more than an academic degree to achieve his goals. True, management is something you learn in reality through trial and error, but even some of the real hot shots in corporate life struggle to get by with just an academic degree. Many of today’s CEOs of some of the biggest Dutch companies have complemented their academic education with an additional MBA. The benefits of extra education are being recognized more and more overseas. For instance, roughly one-third of Google’s employees are required to do GoogleEDU, a tough two-year study programme. This programme trains Google’s employees guided by an approach based on the analysis of data – not surprising for an organization whose core raison d’être relies on data.
171 billion dollar Costs of this type of education are significant. In 2010, US corporate companies spent over 171 billion dollars on training and courses for further educating their employees. The Netherlands follows that pattern in spending millions of Euros on education. According to recent figures, 3.2 billion euros are spent yearly on ‘non-funded education’: follow-up study programs or educational training programs at private institutions. Although this number amounts to only 10% of the total sum spent on regular education by the Dutch government, it still comes down to approximately 2,500 euros per participant. Roughly one out of eight Dutch persons aged 17 years or over participates in one of those ‘non-funded educational programmes’. The larger part of this group – approximately 80% - takes part in this training or programme in line with his work environment or job requirements. This percentage places the Dutch well above the European average.
What’s really crucial? Figures only tell half the story. However, what is really crucial is to investigate whether the investment in fact is worth the time and money? Can the investment be justified by the fact that ultimately it really pays off? This concern is not only top in the minds of participants in the programmes, but also for employers who often pick up a large part of the bill for these costly programmes. In addition, the many providers of the several programmes would be very excited if their proclaimed added value were officially supported by scientific research. Remarkably enough it took quite a long time for economic and social researchers to present a coherent answer to this question. The way their method works is two-fold. The first is - next to most apparent, also the least interesting of the two (for employers, at least) – it focuses on the change in salary occurring after a person has finished the programme. Researchers claim that a change in salary serves as a reflection of the individual improvement in productivity – which, following their reasoning is clearly due to the training.
When analysed following this method, most courses appear to have a significant impact. Management programmes stand out in their apparent value for money, featuring salary increases of 18%. These salary increases are also visible in other training programmes – ‘on the job’ training ensures male employees of a salary increase of 3,6%, while women benefit even more from such training: their salaries rise 4,8%. When training is performed ‘off the job,’ salary increases can add up to 6.6% and as much as 9.6%. The question remains: do the numbers justify the employer’s investment? Or does it only mean that he paid a large sum of money to temporarily have to do without one of his valued employees and on top of that, he has to pay a higher salary after he or she returns? This marks a hot topic in scientific research. Trained and educated people are more productive than those who are unskilled – that much is clear. But, exactly how much more productive? In this particular context quantifying remains highly problematic.
Equally divided There are only two Dutch study programmes openly discussing the return on investment of their programmes. Although the two differ in their use of data and methods, both draw the same conclusions. These conclusions are similar to what we witnessed when we looked at the figures on salary development and productivity increase. So what do the numbers reveal? They reveal that the increase in productivity is about twice as much as the increase in salary. In other words: education pays off. It pays off for the individual employer whose salary is raised after the effort he has put into the study; for the employee that benefits from the expenses made and last but not least it pays off for the 19,000 Dutch providers of educational training and programmes, who can now finally support their emphasis on the added value of their programmes with scientific research.
Management Team’s top lists the best educational providers according to the readers of Management Team
Academic MBAs in The Netherlands Nyenrode 8,12 TSM 8,05 RSM Rotterdam 8,0 TiasNimbas 7,95 Maastricht University 7,8 Generic Management Programmes BSN 8,17 IBO Business School 7,88 Avans 7,83 ICM 7,75 De Baak 7,65 Schouten & Nelissen 7,46 GITP 7,38 ISBW 7,24 NCOI 7,19 LOI 7,12
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