Running an Effective Bursary Scheme

Education is changing very fast. With a new set of options open to
promote corporate education and training – is it not time to rethink the
bursary scheme?

Any HR manager will tell you about Bursary Schemes – probably while
letting off some steam and telling some tales of people that never
really gave back to the company. Bursary applications are typically the
HR responsible’s second least favourite activity maybe just after
disciplinary hearings. It is simply hard to justify investing lots of
money in the career and development of a few people, while having to
answer for the development of the whole company.

Unlike medical schemes it seems that bursary schemes are moving from
a “defined benefit” to a “defined contribution” model more frequently.
Fewer companies are trying to achieve anything out of their bursary
schemes and only do full or part funding of qualifications. For many
companies bursary giving got to the point where they never had one or
got rid of bursaries after many failures to administer these programmes
effectively.

This promotes an HR stance that states that “we will hire trained
people” which typically translates into recruitment bills of more than
15% of annual staffing costs, higher staff turnover and an estimated
premium in salary often as high as 50% over hiring talent and developing
them over time. Surely this same 65% of annual CTC could be minimised by
targeting key positions and developing staff into them. There is simply
just not enough talent and although in a couple of countries in the
world there is a skills mismatch in what schools are producing and what
industry wants (South Africa, Nigeria, India being some of these) –
there is generally a range of skills that are hard to procure in any
market in the world.

So ideally bursary schemes would aid in this dilemma and promote and
attract the required skills to the company that would feed into the
skills needed by the company. It would certainly be much harder for a
person to say no to an opportunity to further their studies while
working – would it not?

A couple of things go wrong in bursary schemes

• As soon as a bursary student is about to graduate, the person
  that it is given to leaves the company for greener pastures. It is as if
  giving them a bursary is a sure way to get rid of staff, while the
  theory at least says that development should be a way to retain
  staff.

• People are asked to sign commitment contracts that are either
  poorly formed, illegal or that simply does not work.

• Bursary programmes are long term commitments – 1-5 years and
  funding is annualised based on performance – this often breaks the
  pattern when a student fails a single subject. This leaves the company
  and the bursary in a challenge.

• Bursaries are generally only available to a few.

• Bursaries are typically for qualifications that promote a
  person’s career path and not necessarily the growth objectives of the
  companies.

• Headhunters have developed strategies for buying out bonds or
  bursaries and this may both result in high legal costs and recruitment
  fees – depending on which side you are negotiating from.

• Bursary schemes are increasingly challenged as promoting
  anti-competitive behaviour by only favouring a few providers. On the
  other side – you want training to fail within your business’s
  parameters.

Are they then even worthwhile pursuing at all? Yes – the reality is
that in the war on talent, a bursary is a very attractive tool with
which to recruit a person or incentivise a person to stay in a
company.

So in an ideal world a bursary scheme is used to:

• Attract high potential employees to work with the company either
  from as early as school or from other companies.

• Build skills and knowledge in a particular area in the
  business

• Incentivise existing staff to expand their own knowledge by full
  or part funding of own studies

• Incentivise existing staff to study into areas that would benefit
  their existing work.

So it seems that the bursary schemes to be effective it has to be
revamped and brought back into line with the objectives that it should
be achieving for an organisations.

An ideal bursary scheme should achieve a range of objectives

• A scheme should be simple, accessible and offer maximum benefit
  to the company or the objective that is being promoted.

• An ideal scheme will be linked to the performance management
  system and development goals of individuals and offer a range of skills
  that can aid in a person performing more effectively in their current
  job or position.

• Schemes should differentiate between what a person wants to study
  for their own benefit and what are skills that are ideal for the
  company.

• A scheme should ideally offer the ability to study and work to
  maximise the impact of both.

• An ideal scheme should be able to offer short programmes that
  keep people hooked into the next step, while achieving the overall
  objectives of the programme.

• An ideal programme would leave the choice of where to study with
  the student while ensuring that th

A bursary scheme that works on funding individual modules within a
larger qualification is an ideal tool for companies to achieve the best
of both worlds. By offering access to shorter programmes that contribute
to degree purposes, the company can link its short-term objectives and
spending to a more controllable and controlled outflow that pays for
performance and success.

The additional benefit is that employees remain motivated to perform
and bursaries can move from being a burden to a tool to promote success
within the firm. The longer-term goal of getting a degree is a powerful
motivator that drives retention if properly harnessed.

By also focusing on a more modular approach companies can typically
offer access to as much as 6 times more staff and only push those that
achieve beyond certain levels. This creates a culture of excellence and
by many having access to knowledge within a business, creates a further
opportunity for people to contribute to the bottom line more effectively
with a wide knowledge base in the company.

With this approach there is a further benefit that Free Business
Education can be made available to all staff and those that perform well
in these subjects can be assisted to subscribe for individual
modules.

The critical success factors for an effective bursary scheme would
include

• Selecting the right staff to be trained

• Promoting the objectives of the scheme to a wide base

• Having clearly defined funding criteria in line with corporate
  objectives

• Adequate funding of a scheme to achieve its objectives

• Clear administration of the scheme

• Achievement of realisation of benefits to the company

• Timeous payments for studies and related resources

• Working with relevant training and education providers to ensure
  that there is a clear understanding of available programmes

Conclusion:

The funding of studies is a valuable tool to ensure that the company
achieves its objectives. In the past there has been poorly administered
schemes that promoted the wrong objectives and simply benefited a few –
while creating resentment in the many. Through the advent of a range of
new education options there are new ways in which training and
development can achieve exponentially more through the structuring of
effective bursary schemes.