MBA - benefits for the Employer?
Discussion
Hi all
It's annual performance reviews and bonus time. One of my direct reports has had a good year in terms of achieving his targets. Whilst he's going to get a decent bonus he knows that I can't give him a payrise because he's at the top of his band. So instead he's asked the company to sponsor him for an MBA. This will cost IRO £30k. My question is - what are the benefits to the Company in sponsoring this? Off the top of my head
- we get to retain him for another 2/3 years
- we get the benefits of his learning (?)
- it shows others in the team that we encourage L&D
Anything else that people can think of?
Also, if you have done an MBA, how did it benefit you personally?
It's annual performance reviews and bonus time. One of my direct reports has had a good year in terms of achieving his targets. Whilst he's going to get a decent bonus he knows that I can't give him a payrise because he's at the top of his band. So instead he's asked the company to sponsor him for an MBA. This will cost IRO £30k. My question is - what are the benefits to the Company in sponsoring this? Off the top of my head
- we get to retain him for another 2/3 years
- we get the benefits of his learning (?)
- it shows others in the team that we encourage L&D
Anything else that people can think of?
Also, if you have done an MBA, how did it benefit you personally?
55palfers said:
If your chap is the top of his payscale, you already know he has not his targets and there is no promotion plan, what is the point of an annual review?
The annual review is to(i) Review performance
(ii) Agree bonus
(iii) Agree any payrise (he'll get about 5% which is the same as everybody else, he's looking for 15%-20%, which is probably his market value but not what is role requires)
(iv) Identify any training needs and targets for next year
I'd love to promote him but the only role he'd be relevant for is mine.....
Flumpo said:
What business are you in and what does he do? 30k seems a lot of money and unless it relates to what you are doing what’s the point?
Plus he’s going to want time off to do it, in my experience once one is allowed they all want to do one.
We're a media company and he's Head of one of the Finance teams. It would be ideal for him n that it would prepare him for an FD post. the only benefit to us is that we'd keep him for another 2 / 3 years. The time off shouldn't be an issue.Plus he’s going to want time off to do it, in my experience once one is allowed they all want to do one.
shirt said:
To prepare him for senior leadership. If you dont have a progression plan in place for him then its a waste of money. However he will quickly recognise this and, along with the lack of raise, will start looking for the door.
It's not that he's not capable. He's excellent, however we just don't have any vacancies. Part of me is tempted to let him go but we have a couple of projects that he would have been invaluable for (and I guess he knows that as well 
)The option of providing development for staff is primarily to benefit the business, either through the gaining of new relevant skills or through improved morale, both of which should improve productivity.
If the RoI stacks up, then £30k may be a bargain. If it doesn’t, it’s an expense you could do without.
If he’s good, couldn’t you create a new role with further promotion opportunities in mind? Or if he’s at the top of his tree with nowhere else to go, then accept he’ll be off, giving you the opportunity to hire someone new and probably less expensive.
Let us know what you do.
If the RoI stacks up, then £30k may be a bargain. If it doesn’t, it’s an expense you could do without.
If he’s good, couldn’t you create a new role with further promotion opportunities in mind? Or if he’s at the top of his tree with nowhere else to go, then accept he’ll be off, giving you the opportunity to hire someone new and probably less expensive.
Let us know what you do.
I'm a qualified accountant with a MBA. I also have a masters.
In the UK there's some people who don't think much of the MBA. There's others who think it's a must. Each to their own.
I think I have benefited from the MBA to some degree. I have had a 12.5% increase in salary. I hope to think in the long-term I'll be better placed to walk into a more senior management role in a few years time.
I've dropped you an email. Happy to talk about the details.
In the UK there's some people who don't think much of the MBA. There's others who think it's a must. Each to their own.
I think I have benefited from the MBA to some degree. I have had a 12.5% increase in salary. I hope to think in the long-term I'll be better placed to walk into a more senior management role in a few years time.
I've dropped you an email. Happy to talk about the details.
I was lucky enough to get my last company to sponsor my MBA, couple of thoughts:
Employee perspective
- best 'professional' thing I have ever done. Bloody hard work doing it at the same time as doing the day job (every other friday / saturday at school, homework most nights after 10 / 12 hours in the office) but well worth it
- gained loads of additional experiences / skills / insights but the most important thing I got out of it was a much better understanding of my motivations, behavioural traits etc and how i work with others traits / personalities etc. I know 'my' school had a pretty heavy focus on this side versus other schools which focus on strategy or finance but i'm glad they did
- gave me the confidence, ability and credibility to push for promotions / more responsibility, within 18 months had increased my package by close to 50%
- i was locked in (if I left within 2 years of completing I had to repay) but was more loyal and motivated regardless
- I did leave about 3 years after completing the MBA due to a change in reporting line (5 years after starting) but without the MBA would have left a lot sooner and been less motivated / productive etc
Employer perspective (based on speaking to several senior people at the time / after)
- good retention tool, relatively cheap compared to pay rise or the total cost of hiring to replace me (recruitment costs / ramp up time of new hire etc)
- they believed in the additional value they would get from me with the new skills / experience and feedback was it worked out that way
- they didn't fear opening the flood gates, people had asked before and after and they were happy to say yes to a few and no to most
- they valued showing they did invest in people who showed potential - work hard, do a great job and you will be rewarded / developed
The only other thought I'd have is don't go for a remote learning course - a lot of the benefit I got out of it was the interaction with my cohort / lecturers, something I would not have got remote learning.
Employee perspective
- best 'professional' thing I have ever done. Bloody hard work doing it at the same time as doing the day job (every other friday / saturday at school, homework most nights after 10 / 12 hours in the office) but well worth it
- gained loads of additional experiences / skills / insights but the most important thing I got out of it was a much better understanding of my motivations, behavioural traits etc and how i work with others traits / personalities etc. I know 'my' school had a pretty heavy focus on this side versus other schools which focus on strategy or finance but i'm glad they did
- gave me the confidence, ability and credibility to push for promotions / more responsibility, within 18 months had increased my package by close to 50%
- i was locked in (if I left within 2 years of completing I had to repay) but was more loyal and motivated regardless
- I did leave about 3 years after completing the MBA due to a change in reporting line (5 years after starting) but without the MBA would have left a lot sooner and been less motivated / productive etc
Employer perspective (based on speaking to several senior people at the time / after)
- good retention tool, relatively cheap compared to pay rise or the total cost of hiring to replace me (recruitment costs / ramp up time of new hire etc)
- they believed in the additional value they would get from me with the new skills / experience and feedback was it worked out that way
- they didn't fear opening the flood gates, people had asked before and after and they were happy to say yes to a few and no to most
- they valued showing they did invest in people who showed potential - work hard, do a great job and you will be rewarded / developed
The only other thought I'd have is don't go for a remote learning course - a lot of the benefit I got out of it was the interaction with my cohort / lecturers, something I would not have got remote learning.
Thanks mashwort and others - some very helpful suggestions there.
It's expensive but I do want to retain him so I've approved his application and sent it to HR (the bane of my existence). Hopefully they'll approve.
ps Just to clarify - i wasn't looking to understand the benefits to the employee - they're fairly obvious. It was the benefits to the Employer (so that I can convince HR and the CEO).
It's expensive but I do want to retain him so I've approved his application and sent it to HR (the bane of my existence). Hopefully they'll approve.
ps Just to clarify - i wasn't looking to understand the benefits to the employee - they're fairly obvious. It was the benefits to the Employer (so that I can convince HR and the CEO).
It was an estimate/guess, but it seems in the right ballpark.....
https://www.thecompleteuniversityguide.co.uk/unive...
https://www.thecompleteuniversityguide.co.uk/unive...
Couple of additional thoughts.
Retention: This is not guaranteed. You can make it difficult for him to leave by setting out a payback scale for the cost of the MBA if, say, he leaves at any point over the following five years. But he would become a more attractive employee to a rival company that may pay this for him. And what if you had to sack him or make him redundant?
Company benefit: It sounds as though he's at the top of tree and thus already highly capable. Whilst there's always scope to improve, the tangible day to day benefits are unlikely to be insignificant. The litmus test is to consider if that £30k investment is likely to lead to at least a £30k improvement to the bottom line once he's graduated. But there are a few plus points:
Firstly, having an MBA in your team can add credibility to your offer to clients. In situations where a proposal is marginal in terms of a client choosing you or a competitor, it 'may' result in the critical additional tick in your box.
Secondly, the additional acquired skills can migrate to others; either informally by virtue of day to day work, of formally through internal training.
However, from what you have said, it seems that this chap has pretty much reached the ceiling and all that's left is his bonuses. I can't help thinking that you would end up paying to benefit a rival employee who may have greater onward promotion opportunities.
Retention: This is not guaranteed. You can make it difficult for him to leave by setting out a payback scale for the cost of the MBA if, say, he leaves at any point over the following five years. But he would become a more attractive employee to a rival company that may pay this for him. And what if you had to sack him or make him redundant?
Company benefit: It sounds as though he's at the top of tree and thus already highly capable. Whilst there's always scope to improve, the tangible day to day benefits are unlikely to be insignificant. The litmus test is to consider if that £30k investment is likely to lead to at least a £30k improvement to the bottom line once he's graduated. But there are a few plus points:
Firstly, having an MBA in your team can add credibility to your offer to clients. In situations where a proposal is marginal in terms of a client choosing you or a competitor, it 'may' result in the critical additional tick in your box.
Secondly, the additional acquired skills can migrate to others; either informally by virtue of day to day work, of formally through internal training.
However, from what you have said, it seems that this chap has pretty much reached the ceiling and all that's left is his bonuses. I can't help thinking that you would end up paying to benefit a rival employee who may have greater onward promotion opportunities.
StevieBee said:
Couple of additional thoughts.
Retention: This is not guaranteed. You can make it difficult for him to leave by setting out a payback scale for the cost of the MBA if, say, he leaves at any point over the following five years. But he would become a more attractive employee to a rival company that may pay this for him. And what if you had to sack him or make him redundant?
This is exactly what I did. My company was paying me to do an MBA but couldn't offer me a suitable opportunity. They had a payback clause but it was considerably less than it would have cost my new employer to recruit me through a headhunter so they had no problem paying it.Retention: This is not guaranteed. You can make it difficult for him to leave by setting out a payback scale for the cost of the MBA if, say, he leaves at any point over the following five years. But he would become a more attractive employee to a rival company that may pay this for him. And what if you had to sack him or make him redundant?
StevieBee said:
Couple of additional thoughts.
Retention: This is not guaranteed. You can make it difficult for him to leave by setting out a payback scale for the cost of the MBA if, say, he leaves at any point over the following five years. But he would become a more attractive employee to a rival company that may pay this for him. And what if you had to sack him or make him redundant?
Company benefit: It sounds as though he's at the top of tree and thus already highly capable. Whilst there's always scope to improve, the tangible day to day benefits are unlikely to be insignificant. The litmus test is to consider if that £30k investment is likely to lead to at least a £30k improvement to the bottom line once he's graduated. But there are a few plus points:
Firstly, having an MBA in your team can add credibility to your offer to clients. In situations where a proposal is marginal in terms of a client choosing you or a competitor, it 'may' result in the critical additional tick in your box.
Secondly, the additional acquired skills can migrate to others; either informally by virtue of day to day work, of formally through internal training.
However, from what you have said, it seems that this chap has pretty much reached the ceiling and all that's left is his bonuses. I can't help thinking that you would end up paying to benefit a rival employee who may have greater onward promotion opportunities.
Agree with all those points. Whilst there's no guarantee on retention IIRC it's a 30 month course and we pay in instalments. (possibly £6k every 6 months). Given that we're paying this he'd be a bit mad to leave before the course has finished.Retention: This is not guaranteed. You can make it difficult for him to leave by setting out a payback scale for the cost of the MBA if, say, he leaves at any point over the following five years. But he would become a more attractive employee to a rival company that may pay this for him. And what if you had to sack him or make him redundant?
Company benefit: It sounds as though he's at the top of tree and thus already highly capable. Whilst there's always scope to improve, the tangible day to day benefits are unlikely to be insignificant. The litmus test is to consider if that £30k investment is likely to lead to at least a £30k improvement to the bottom line once he's graduated. But there are a few plus points:
Firstly, having an MBA in your team can add credibility to your offer to clients. In situations where a proposal is marginal in terms of a client choosing you or a competitor, it 'may' result in the critical additional tick in your box.
Secondly, the additional acquired skills can migrate to others; either informally by virtue of day to day work, of formally through internal training.
However, from what you have said, it seems that this chap has pretty much reached the ceiling and all that's left is his bonuses. I can't help thinking that you would end up paying to benefit a rival employee who may have greater onward promotion opportunities.
As i said there are 3 projects where I need his skills, and I also need him to train up one of his team. He should be able to do all that within 24 months so as long as Ive got him for at least 30 I'm fairly happy.
Now waiting for HR to say " we don't think it's worthwhile".....
I am in exactly the same situation, only that I am on the employee side.
I am currently due to receive a bonus, but I plan to ask the company to pay the school my bonus directly so I don't lose the income tax at one level. I wonder if anyone has any thought whether this is viable? or will HMRC find way to tax the company/myself anyway?
Thanks.
I am currently due to receive a bonus, but I plan to ask the company to pay the school my bonus directly so I don't lose the income tax at one level. I wonder if anyone has any thought whether this is viable? or will HMRC find way to tax the company/myself anyway?
Thanks.
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