Boosting Retention at FedEx

To slow turnover at its hubs, FedEx Express partnered with the University of Memphis to front the cost of a bachelor's degree. Some question whether this partnership results in real education for employees.

November 21, 2019
 
Getty Images/Gary Hershorn

Retention rates are low at the 12 FedEx Express hubs around the country where employees sort through and track packages. The company considers it a success if its employees stay past the 90-day mark, according to Robbin Page, vice president of human resources at the operating company.

To that end, FedEx Express offered a tuition reimbursement program for employees as a benefit to entice them to stay. But when evaluating the program, Page realized that no one working in the hubs was taking advantage.

Page partnered with the University of Memphis to brainstorm ways to get better employee participation. The largest FedEx Express hub is in Memphis, Tenn., where the FedEx Corporation is also headquartered.

The result was LiFE: Learning Inspired by FedEx, which began in 2018 and has already spread to another operating company within FedEx.

“We all realize there’s an upskill movement that everyone should take part in,” Page said.

So far, it seems to be working. The university has received more than 6,000 unique inquiries, and about 2,400 employees have enrolled out of the 22,655 who are eligible. So far about 120 students have graduated from preparatory courses to ones that lead to a degree, according to Page, and five students have already graduated because they had prior credits.

For those who participate in the program, the turnover rate has decreased by 3 percent, Page said. And participating employees are 25 percent less likely to leave than those who do not participate.

Over the past few years, several companies have started programs to help employees earn degrees. Some offer tuition reimbursement, while others pay the costs up front. Many use intermediary companies to manage tuition benefits.

Similar to programs offered by companies such as Uber, FedEx will receive the bills from U of M Global, the university's online arm, so employees don’t have to front the cost. Through the program, employees can earn a bachelor’s degree in professional studies with a focus on organizational leadership. A program called Prep Academy is designed to help students get accustomed to the online platform, which is run by software company D2L.

However, FedEx Express isn’t using intermediary companies like InStride to manage the program. Page attributes the smooth rollout of the program and its initial success to partnering with the right university.

Richard Irwin, executive dean of U of M Global and academic innovation at Memphis, said the institution and FedEx have a long-standing relationship. The company has naming rights on sporting facilities, employs students at its call centers and supports its FedEx Institute of Technology.

Irwin said the university chose not to outsource the work because they wanted to “build it from within.”

The leadership degree program the online university offers didn’t change for the FedEx program. The Prep Academy component was built from a few existing courses, Irwin said, and it includes some FedEx content to show employees how they could build their careers at the company by earning a degree. The retention rate for employees who move from the prep courses to the undergraduate courses is 83 percent.

Irwin said Memphis chose to offer the leadership degree because it is a flexible program that could accommodate credits from other colleges as well as experiential credits. It blends business, communications and public administration courses. The degree is expected to take six years to complete if employees stay on pace to complete six credits per term.

Some worry this approach threatens academic freedom. Johann Neem, a history professor at Western Washington University, said he doesn’t think the degree offering is a “good college education.”

“A good college education should bring people into a true academic environment where students can explore interests,” Neem said. “It should not be a narrowly constructed degree to simply provide a credential. That’s not college.”

Beyond the issue of limiting students to one degree option, Neem said the “alliance between a university and a company is deeply problematic” because universities should be autonomous.

Instead, Neem said FedEx could let employees take time off to pursue degrees at local public institutions. Or it could train workers itself. But asking a university to “tailor itself” to what a company needs is dangerous, he said.

“It’s insulting to working people to say you need a degree but we’re not going to give you access to a rich experience,” he said, adding that higher education and society at large need to find ways to help people have those experiences at any stage in their lives.

Irwin said the university chose to offer the leadership degree to address some of these issues. Because it is a broad program, students can take a greater variety of courses.

“It’s also important that we guide all students toward a successful academic path,” he said.

If students have substantial college credits from a previous program, they can also request to pursue a different major.

FedEx Express also liked the idea of offering a leadership degree “because they thought it spoke volumes to employees that they wanted them to move up,” Irwin said.

FedEx has always been committed to hiring from within, according to Page. She and her team are developing employment maps so people who work in the hubs can see where else they could go within the company of more than 235,000 employees. She’s also combing through job descriptions and rethinking whether all the jobs require a four-year degree, or if some require skills that could be gained through shorter postsecondary programs.

The company is also trying to make the program as easy as possible for employees to access, Page said. It refitted a space in its Memphis training center to serve as a learning center, filled with computers and staffed with instructors. A similar facility is being built near the Oakland, Calif., hub. No books are needed for the program, and students get matched with tutors who can provide 24-7 support. FedEx also donated iPads to the university to lend to students.

“If you’ve got the desire, we want to make it easy for you,” Page said.

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