The corporate sponsorship of your MBA must be a mutually beneficial deal between you and your employer.
You have arrived at the point when the question is not whether to go for an MBA but how to do it. Getting the degree is a costly endeavour - even the cheapest degree could cost you thousands of dollars or euros. Naturally, the issue of tuition costs will arise and then the issue of finding the money will preoccupy you.
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You search through your personal savings, parents’ bank accounts, loan and scholarship options to find the best way possible to finance your MBA. While doing this, and if you are already part of the active workforce, don’t forget the option of seeking sponsorship from your employer. Searching through the corporate policies of your organisation is then your priority.
Many companies, particularly those in the financial, consultancy, private equity, technology and investment sectors, have institutionalised tuition assistance programmes in their corporate policies. Companies such as Deloitte, Intel, Google, Amazon, Disney and Lockheed Martin are known for their commitment to finance the MBA studies of worthy employees.
“Organisations typically support MBA pursuits for two reasons - employee development and succession planning. In the first case, companies support the cost of MBA programmes as part of their commitment to employee training and development,” says Todd Rhoad, who is the managing director of Atlanta’s BT Consulting and co-author of several guidebooks for aspiring MBAs and recent graduates.
The normal trade-off is that the employer provides part of the financing while the employee makes a commitment in return. Each company determines the level of commitment and the return that it wants through a formal retention mechanism.
Some corporate sponsorships are available under special deals between business schools and their corporate sponsors which provide a limited number of scholarships to students. These scholarships are partial and normally cover 25% to 50% of the tuition fee.
Three factors are critical when seeking corporate sponsorship. First, become thoroughly familiar with the benefits policies as written, particularly with regard to what is explicitly excluded. Second, get a good understanding of the degree of flexibility written into the policy to accommodate a variety of programmes and circumstances. Third, the most critical factor, stay sensitive to the personalities of those managers whose support and approval you most need.
And even if your company doesn’t have such a programme, this shouldn’t stop you from trying to get the financing.
Then comes the big question - how to make your employer see the mutual benefit to your continued education with an MBA? In general, getting financial support for your MBA from your employer depends on the match between your career plans and those of your organisation.
“[Making] a proposal [to your employer to finance your MBA] should address the benefit to the company,” Rhoad says, “[including] areas where the company could improve and how you will help them, a review of the courses to be taken and how they will provide knowledge that can help improve the company’s performance.”
“We take a very long-term view when we’re making a decision to sponsor somebody,” says Mel Wolfgang, who is part of Boston Consulting Group’s North American management team, where he is responsible for all consultant human resources and development.
Getting Corporate Sponsorship Comes with a Contract
No employer, unless it’s your parent, will pay for your MBA just like that. Every employer would need to be sure that money given will reap a dividend. Corporate sponsorship is a long-term business arrangement requiring significant commitments from both you and your employer as well as yielding significant returns for both parties.
That’s why it usually goes hand-in-hand with a sponsorship contract. Your employer will bind you with a contract according to which you would be obliged to stay with the company for a certain period after you get the MBA or pay back the money. It is also possible that your employer will add other types of stipulations to protect himself in case you don’t perform well at exams, don’t complete the degree or violate the agreement later on.
Other points to consider prior to signing the sponsorship contract are whether the sponsor will limit where you can work in the summer between years one and two of the programme; whether you will return to the sponsor at your pre-MBA level and salary or at a higher level and salary; how many years of work post-MBA are required for your sponsor to annul the cost of the sponsorship or sponsored loan.
Check out: Financing an MBA
That’s why before saying “yes” to the sponsorship contract, “be sure that you understand everything about the repayment terms required by your sponsor, especially what the options are for repayment if you choose not to return to the sponsor after graduation,” Harvard advises. Student loans are not available to refinance or buy out sponsorships.
Relationship of Trust
You might be brilliant as a professional but this might not be enough to secure corporate sponsorship. Other brilliant employees might also be striving for a sponsorship. It’s up to you to convince your boss that you deserve corporate support.
Getting corporate sponsorship depends very much on the relationship of trust you’ve built up at your company. You should have proven your loyalty to the company before making the financing proposal to your boss. Building a relationship of trust starts with your entry into the company through your daily duties at work, collaboration with other staff, building a network including your colleagues, supervisor and ultimately those decision makers who will decide whether or not to award corporate funding. Needless to say, the support of your colleagues and direct supervisor will be invaluable in this situation.
A clever move when negotiating your sponsorship is to inform your boss you intend to pay some of the additional costs of the programme such as travel expenses and accommodation. This could also be used as a means to convince your employer that you are serious about the degree and this kind of gesture may further help you build trust.
Make a Sponsorship Proposal
The next step is to make a sponsorship proposal. In a few words, the proposal must be specific, concrete and professional, made at the right moment to the right people.
In general, the proposal should present in detail your motivation to do the MBA and how this will help the company’s future development and interests. It is vital to show how your MBA will develop the company’s business. Clearly show the benefits of the MBA and how it will add long-term value to the company. Spell out how each aspect of the courses and skills you acquire would bring positive development to each aspect of the company’s business. Show how the degree will further strengthen your soft skills, build on your strategic thinking, your ability to manage people and leadership potential.
To summarise, when discussing sponsorship with your employer you should be ready to answer the following questions:
- How much of the tuition and related costs are you asking the company to pay?
- Are you prepared to personally contribute to financing your MBA and, if so, how much?
- How much time will you need off work for classes and educational travel?
- How will furthering your education bring value to the organisation?
- How quickly can what you learn be applied at work?
- Which class projects will tie into your professional work?
- What is the curriculum’s specific relevance to your work?
- What are your career plans after you graduate?
- What are your thoughts about a post-MBA long-term employment contract?
- Can you expect a rise or promotion after completing the programme?
“Outline your goals, career path and future plans in the company,” Rhoad says, “and most importantly, define your commitment to the company after graduation as part of their return on investment.” Good timing is critical to your proposal’s success. If your company has enjoyed positive financial results over the past quarters and has growth prospects, that might be the opening you need.
Check out: Funding Your MBA: Scholarships, Sponsorships, Savings, and More
Sell your MBA to the company as an investment. They will pay for the degree, so show them how it will pay off. Promote yourself in the best way possible. Spell out your vision of the company’s development over the next couple of years, how you see yourself from this development perspective, and how you will contribute to these goals and add value. So considering the sponsorship proposal as a business plan is a good idea to start with.
This article is original content produced by Advent Group and included in the 2016-2017 annual Access MBA, EMBA and Masters Guide under the title “A Marriage Made in Heaven”. An online version of the Guide is available here.