Work at the Memphis Hub can be grueling and non-management workers turn over at high rates. It’s a tough job, with:
- Exposure to the elements
- Physically demanding work
- Work during the middle of the night
FedEx Express faced a retention challenge with its employees at the Hub. Robbin Page, vice president of human resources for FedEx Express, knew how much voluntary attrition was affecting the bottom line. It cost $3,500 to replace each employee that voluntarily left the Hub. The higher the turnover, the more money was spent on worker replacement and onboarding costs.
Research suggests that one way organizations can keep employees is through skills development. Gallup found that 87% of millennials prioritize professional training, with career growth being very important to them. Career development is both possible and encouraged at FedEx Express—particularly due to the company’s promote-from-within culture.
Also, the wider FedEx enterprise has a tuition assistance program for professional development—but Hub workers weren’t taking advantage.
“I think there are two reasons that hub workers didn’t use the tuition reimbursement program,” Page said. “One, it was $3,000 per year. Now, there’s no cap—you can use it in perpetuity. But as you probably know, $3,000 doesn’t go very far when you are looking to earn a college degree and starting from the beginning. If every credit hour is $425, then employees can take maybe a couple of courses a year, which doesn’t help them get a degree in the short term.” The data agrees—average cost of in-state tuition is nearly $10,000 a year. “The other challenge that these employees in particular have is the fact that it’s a reimbursement program,” Page added. “They can’t outlay the money and then wait and get it reimbursed.” Encouraging employees to earn certifications or degrees can benefit both employee and employer. Having a college degree is one way to earn more than employees could otherwise. For FedEx Express, providing opportunities to earn a degree helps develop a solid pipeline of promotable individuals. But the barriers to entry were too high for many. For those employees making $13 – $15 an hour, something had to change.