Fiat Chrysler Automobiles (NYSE:FCAU) is launching a new program that provides free college tuition for dealership employees, as the automaker looks to combat high turnover in the industry.
Employees of participating Chrysler, Jeep, Dodge, Ram and Fiat dealerships in the U.S. can earn a “no-cost, no-debt” degree from Strayer University, FCA announced Monday. The Degrees@Work program will cover the cost of associate’s, bachelor’s and master’s degrees, or individual classes.
FCA said Degrees@Work is the first benefit of its kind in the auto industry. The Italian-American car manufacturer expects the partnership with Strayer University will help dealerships attract and retain top talent, which has been a challenge for FCA and its rivals.
Based on the latest workforce study from the National Automobile Dealers Association, dealerships reported an average turnover rate of 66% among sales consultants in 2013.
John Fox, director of dealer training at FCA US, said employees at all levels will be eligible to participate in Degrees@Work. FCA’s U.S. dealerships currently employ about 118,000 salesmen, service technicians and other workers.
“I have to believe this puts our dealers out in front of their competitors” and other businesses, Fox said. “We want our dealers to become the employer of choice in their market.”
Karl McDonnell, CEO of Strayer Education (NASDAQ:STRA), said corporate partners have seen turnover reduced by as much as 50%, or in some cases, a little bit more.
“It’s a win-win for everyone,” McDonnell added.
Strayer Education recently launched a new division, Strayer Work, to better collaborate with employers. The company has teamed up with about 300 Fortune 1000 companies to provide higher education programs.
FCA believes investing in college will create a better experience for customers, too. Studies have shown that workers perform better when they seek college degrees, Fox noted.
“We know the customer experience will improve when we have people at our dealerships longer,” Fox said.
Degrees@Work initially will be available through dealers in FCA’s Southeast Business Center, which covers 356 retail locations in six states. According to Fox, the program will roll out to FCA’s 2,600 dealers across the country by the third quarter.
Strayer University, which specializes in adult education, offers classes online or at one of its 77 campuses. Dealership employees can also get course credit for training and work experience.
The school will customize its curriculum for FCA employees, McDonnell said. Class assignments and case studies can be tailored to the auto industry, making courses more relevant for people working at dealerships.
Students won’t be responsible for any out-of-pocket costs, nor will they need to front the money and seek a refund later. FCA is covering all costs directly, unlike similar programs from companies such as Starbucks (NASDAQ:SBUX). The coffee chain reimburses employees for the cost of an online degree from Arizona State University.
Investing in Employees
“A college degree is a life-changing event. Cost is a tremendous barrier that people face, and this is a major investment for FCA to do something like this,” McDonnell said.
FCA and its dealers will jointly cover the cost of Degrees@Work, according to Fox. He said the program should pay off in the long run, given the high cost of employee turnover.
The college program comes at a critical period for FCA dealerships. The company is in the middle of a five-year plan that calls for investing up to $60 billion globally and sets aggressive sales goals for brands like Jeep, Chrysler and Alfa Romeo.
FCA needs great talent on the retail end to meet its ambitious plans, Fox said.
“We’ve had 61 consecutive months of sales growth. The only way that’s possible is with the help of our dealers,” he noted.