Fiat Chrysler Offers Free Tuition to Dealer Employees, Families
23 November 2015 - 1:40AM
Dow Jones News
Fiat Chrysler Automobiles NV is offering free tuition at a
for-profit college to about 700,000 dealer employees and family
members in a push to stem turnover in the showroom and service
bays.
The benefit is rare for the auto industry. Compensation for
salespeople, service technicians and others at stores selling new
automobiles is typically handled by the dealership owners, while
auto makers cover pay and benefits for white-collar employees and
factory workers.
Fiat Chrysler has seen roughly five years of consecutive monthly
sales gains and, as U.S. demand races to near-historic highs, the
company says a constant tide of turnover threatens momentum at its
2,635 dealerships. In a partnership with Virginia-based Strayer
University, the Italian-U.S. company is launching a Degrees@Work
program.
Fiat Chrysler's head of dealer development, Al Gardner, said
dealers—struggling to keep talented personnel—asked for help in
developing a program that allowed employees to help themselves.
"Our dealers said giving worker more access to education is the
top issue for them," Mr. Gardner said. "It's not just about keeping
the people we have or attracting people from Ford or Nissan
dealerships, it's also about attracting new people into the
business."
A Strayer bachelor's degree is valued at $58,000, and dealers
must commit to helping fund employees, although Fiat Chrysler would
shoulder much of the cost. Mr. Gardner didn't disclose the auto
maker's expected costs. Fiat Chrysler will also handle the bill for
other levels of education, including a master's degree.
Other auto dealers also offer education programs. General Motors
Co., for example, offers to help employees of dealers gain access
to higher education, but doesn't provide full funding.
The National Automobile Dealers Association's annual workforce
study, released in late October, found annual turnover at
dealerships has risen over the past three years. Last year, people
left their jobs at a rate of 39% across all positions, a 3%
increase from the previous year.
Sales and service workers, representing the heart of a
dealership operation, turn over at significantly higher levels,
with sales consultants notching a rate of 72% and hourly repair
technicians 55%.
Fiat Chrysler's program isn't without its risks. Employees could
take the classes and then move to another dealer for a higher
paycheck or leave the industry altogether. The company began
testing the program in May at 130 dealerships.
Jim Arrigo, owner of Arrigo Dodge Chrysler Jeep Ram in West Palm
Beach, Fla., signed up and said the program can build morale and
loyalty. About 20 of his employees are taking classes.
"You also do things like offering 401(k), make it easy to take
family vacations or claim sick days," Mr. Arrigo said. "There's
isn't any better way to look an employee in the eye and say 'here
is something we are doing to help you.'"
Mr. Arrigo's sister-in-law, Katherine Watson works as an
administrator at another location and completed her seventh week of
classes.
"This is huge for me because once I am done, I don't have that
expense hanging over my head," Ms. Watson, 50, said.
Strayer Chief Executive Karl McDonnell said a portion of the
curriculum will be geared toward the needs of Fiat Chrysler and the
auto industry. He said courses include marketing, consumer behavior
and information technology.
Fiat Chrysler joins a list of other companies offering free
college tuition to employees. Starbucks Corp. offers to pay for
four years of college to all employees who work more than 20 hours
a week, and extended the coverage to include families of U.S.
veteran or active military reservist the company employs. In June,
health insurer Anthem Inc. began offering a similar program to its
55,000 full and part-time workers.
Write to Jeff Bennett at jeff.bennett@wsj.com
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(END) Dow Jones Newswires
November 22, 2015 20:25 ET (01:25 GMT)
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