A corporate university is an internally organized employee development institution that facilitates organizations to grow the skills of employees by promoting their learning and knowledge. The primary goal of a corporate university is to provide the foundation for employee and management training, and leadership development to advance employee’s effectiveness, engagement, performance, improve skillsets, expand knowledge as well as encourage competitive recruitment of top talent in a rapidly changing economy.
More companies are recognizing the benefits, along with the need, of investing in ongoing professional development. The understanding of the importance of providing planned, structured training through corporate universities is exponentially growing among corporate leaders. The number of these universities doubled from 1000 to 2000 between 1997 and 2007, and then doubled again, between 2007 and 2011 to 4000. What that means in terms of spending on corporate training is profound, with a 2012 estimate of around $400 billion for G20 countries, according to the consulting group Adventure Associates.
There is solid evidence showing that investing in corporate training can lead to increased financial performance for companies. Not surprisingly, better trained employees perform at higher levels than competitors. According to the Association for Talent Development (ATD):
- “Companies that offer comprehensive training programs have 218% higher income per employee than companies without formalized training. Furthermore, these companies also enjoy a 24% higher profit margin than those who spend less on training. It is apparent that continuously investing in training and development, even when there are economic downturns, is the smart move to increase the overall performance of the organization.”
- “At the root of these fantastic results is increased employee productivity, which in turn, is driven by the skills advancements made possible through employee training and development. As it turns out, training is one of the most effective things that a company can do to increase productivity. For example, in a study conducted by the National Center on the Educational Quality of the Workforce (EQW), increases in workforce education level were far more effective at increasing productivity than increases in the value of equipment (a 10% increase in both produced a productivity gain of 8.6% for education vs. a mere 3.4% increase for upgraded equipment).”
Advantages of the Corporate University
- Employee Retention
Attracting and retaining good employees is vital to the health of any ongoing business corporate culture, post COVID-19. Also, few human-asset developers dispute the fact that employees want to do a good job. Therefore, it becomes obviously clear that for companies to thrive, they need to do whatever is necessary to help employees succeed in their assignments, or they risk losing them.
Employers need to realize how common it is for employees, particularly among the younger generations, to leave companies if they do not receive the necessary training and coaching to do well in their positions. Research shows that a full 40% of employees will leave their positions within the first year if they do not receive the necessary job training to become effective in their jobs.
To retain top talent long-term, companies must invest in their people by offering continuing skills development and opportunities for advancement. In a Skillsoft survey from the UK, roughly two-thirds of the workers stated that they felt workplace training should continue throughout their career, regardless of their seniority.
Furthermore, another recent national survey of over 400 employees, spanning three generations (Baby Boomers, Generation X, and Millennials), notes that 70% of the respondents indicated that job-related training and development opportunities influenced their decision to stay at their job. The Millennials had the most significant results, with 87% of them citing access to professional development or career growth opportunities (over cash bonuses), as being particularly important to their decision of whether to stay or go.
Also, Harvard Business Review noted that a long-term research project, commissioned by Middlesex University for Work-Based Learning, found that from a sample of 4,300 workers, 74% felt that they weren’t achieving their full potential at work due to lack of development opportunities.
2. Development of Internal Leadership
Legendary coach, Vince Lombardi said, “Leaders are made, they are not born.” Companies often use their corporate universities to grow their employees’ leadership skills and groom employees for current and future management positions, ensuring a continual pipeline of qualified managerial talent. A combination of in-house training, instruction, discussions, and coaching can make a huge difference in the employee’s competence, productivity, performance as well as the overall financial impact of organizations.
3. Establish and Develop Corporate Culture and Values
In conclusion, these internal organizational education centers act as a device for upgrading, modernizing, and reinforcing skill, productivity, creativity, corporate culture, norms, and values, as well as help develop pride in the company’s history, accomplishments, and future vision.
Corporate universities enable companies to shape employees to become more engaged and committed during the on-boarding process, making sure everyone aligns with the company values, vision, and purpose. Moreover, if the corporate culture needs to shift, the corporate university is there to make sure that the shift maintains momentum and results in obtaining general buy-in.
According to Forbes Magazine, an increasing number of corporations are creating their own internal universities, because they feel business schools and community colleges have failed to train the students and equip them with the skills needed to flourish in corporate-specific management and leadership proficiencies, necessary to run their companies.
