Fiat Chrysler Offers Free Tuition to Dealer Employees and Families – Wall Street Journal

Posted: Monday, November 23, 2015

Fiat Chrysler plans to offer free tuition to its employees at dealerships to  avoid turnover at dealerships and service bays.
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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
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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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