Executives drive and lead change, but to be successful they have to invest in their own growth, embrace a continuous learning attitude, and find a way to sponsor these new studies. Dedicating to Executive MBA is a common path. Employers can cater for their key managerial talent by allocating the two most needed resources – time and money. How can you reconcile a tempting, but binding, proposition with your career mobility?
As EMBA programmes are delivered in a part-time format they are a great opportunity for executives to study without interrupting their successful career. Great as it sounds, this is actually a highly demanding option both in terms of time management and financial resources. An EMBA takes between 16 and 24 months, during which time you have to balance work, study, and personal commitments.
You have made up your mind about putting the time, energy, and money into pursuing an Executive MBA (EMBA). Your next decision is almost as important – how to fund your studies. Scholarships, grants, loans, and personal savings are all common sources of funding. However, employer support is another great alternative that is often highlighted because of its many benefits. But let’s take a closer look so that you can assess the advantages and disadvantages.
Employer endorsement vs. sponsorship
To begin with, a clear distinction exists between an employer endorsement and a sponsorship. The former is a requirement for admission at practically every business school and it simply means that your employer acknowledges that you will be spending 20-25 hours a week studying rather than at work. The latter takes the form of financial support and can be partial or full, depending on whether it covers only the tuition fee or all expenses. Business schools are well aware that negotiating company sponsorship can be a crucial part of the application process and most have dedicated website pages and even special guides with tips to help you prepare best.
The website of the EMBA programme at the University of Chicago Booth School of Business (US) clearly states: “Upon admission to the Executive MBA Programme, we require that you submit a letter of support from your employer regarding corporate sponsorship. The company support letter should state that your employer will allow you to attend all class sessions. It is not a commitment of financial support. Asking your employer for financial sponsorship is up to you—and we’re happy to help you do it.”
According to the 2016 Prospective Students Survey Report by the Graduate Management Admission Council (GMAC), 49% of potential Executive MBA students expect to receive up-front tuition assistance or reimbursement from their employer to help pay for their education. Other recent data – this time from the Executive MBA Council – shows that almost one quarter (23%) of EMBA students receive full financial sponsorship, while 36% receive partial reimbursement. Therefore, asking for a corporate sponsorship is still very much a viable option and one you should definitely discuss with your employer.
Advantages of employer support
Company sponsorship certainly has many benefits. The most obvious one is that the money will not be coming out of your own pocket, nor will you need to take out a large loan – resulting in less of a financial burden on you and your family. Having to deal with financial institutions and repay loans does not qualify as an enjoyable experience in anyone’s book. Another big advantage is job security – there will be no need for you to go job hunting after you finish your studies as you would if you enrol in a full-time MBA programme that requires you to leave your job for the period of your studies. Even better, with all your newly acquired knowledge you will likely be able to negotiate a substantial salary increase.
In addition, you will become more valuable to your company not only in the long term, but also immediately. If your employer is prepared to make such a considerable financial investment in you, they must view you as a valuable asset to the company and will be expecting you to promptly inject some fresh global thinking into the organisation. “The [EMBA] programme is designed for the company to reap immediate benefits,” says Dariu Dumitru, IMD Executive MBA programme partner. This immediate return on investment for your employer should be a key element in your negotiation for sponsorship.
One final point concerning the advantages of corporate sponsorship is that in certain countries such as Canada, Germany, and France, the cost to your employer could actually be lower. This is because a large part of the tuition fee is tax deductible.
Disadvantages of company sponsorship
What about the flip side of the coin? Probably the greatest disadvantage to asking your employer to support your studies is that, in order to secure the sponsorship, you will most likely have to agree to some binding terms and conditions. These could include, for example, a clause that states you will have to stay with your current company for two or even five years. This means less flexibility in your career opportunities. Yana Dimitrova, currently studying in the London Business School (UK) Executive MBA programme, highlights: “MBA studies provide many new opportunities for career development, so EMBA applicants should consider in advance whether they are ready to stay another five years with their current employer, and whether they will have the opportunity to implement their newly acquired knowledge and skills there. If this is not the case, then they should maybe look for a different source of funding for their EMBA studies.”
While there is a possibility of finding a better employer who would be willing to repay what you owe to your current boss, changing jobs immediately after you finish your studies would be considered unethical. However, Sylvia Haas, EMBA Executive Director of Admissions, UCLA Anderson School of Management, explains that managers expect employees participating in an EMBA programme to attract the attention of other companies. She believes that even so the EMBA is a win-win option, and shared in 2016 in an Access MBA podcast: “We have a good number of people being headhunted by [other] companies [during their EMBA studies – ed.], because the expectation of everyone is that this person will be developing increasing levels of managing responsibility at a much higher level. So I can’t remember a single time when someone said ‘It [the EMBA] didn’t benefit my employer’, even though in a few cases it might refer to a new employer.”
If you are self-funding your EMBA, you will be free to take advantage of all the new opportunities that you are bound to encounter when networking with fellow students. Also, in many B-schools, for example the London Business School, self-funded students can benefit from a more relaxed fee payment structure – they may be eligible to pay in five equal instalments, compared to the two allowed to company-sponsored students.
Flexible funding options
There are many other funding options to consider. You could share the expenses with your employer through matching funding or percentage splits, or negotiate a special reimbursement agreement where you first prove that you can meet some particular conditions and only then does your employer cover the costs of your EMBA. You could also take some holiday or even unpaid leave to attend classes. Some students even go so far as to use crowdfunding platforms such as Hubbub, GoFundMe, and Indiegogo to secure financing.
However, before resorting to any of these, you should check whether you are eligible to apply for a grant or a scholarship. For example, 31% of the Global EMBA 2017 class at INSEAD (France) are funded by a scholarship. Yana Dimitrova, currently studying at LBS EMBA with partial corporate sponsorship, advises: “Start your research early enough – around 9-12 months before the beginning of the programme – in order to be able to apply for different funding options.”
There will always be advantages and disadvantages to any funding arrangement. Check with your HR department and immediate supervisors as to whether your company has a policy regarding corporate sponsorship, and compile some strong arguments for how an EMBA programme will benefit your role in the company. A top tip would be that if you are less than happy with your current company or industry, it might be better not to ask for sponsorship. On the other hand, if you are more than happy, it would be a mistake to overlook this possibility.
This article is original content produced by Advent Group and included in the 2017-2018 annual Access MBA, EMBA, and Masters Guide under the title “To Bind or Not to Bind”. The latest online version of the Guide is available here.