Your business doesn't have to be big to have an in-house "university" training program. And having one doesn't mean youhave an institutional ego bent on molding men and women into company clones. An increasing number of growing businessesare starting universities -- ongoing skill enhancement programs that draw on internal and external resources to train newemployees and keep veteran ones current with a rapidly changing business environment.

"Training isn't just a nice thing to do anymore," says Laurie Bassi, vice president of research at the American Society forTraining and Development, in Alexandria, Va. "Companies are now thinking of training as a strategic imperative."Companies with in-house universities report several benefits, including:

  • Improved recruitment. Edward Beaumont, CEO of CoreTech Consulting Group, in King of Prussia, Pa., says that histechnology consulting company, which reported 1998 revenues of $42 million, uses training as a key recruitment lure. "Weneeded a robust training and education facility to be competitive," he says. So he started CoreTech University, offering shorttraining sessions to help employees hone both technical and interpersonal skills, such as quality management and teambuilding. The program, which draws on employee instructors as well as professors at Pennsylvania State University andDrexel University, was not so much a differentiator for the company as it was a requirement, says Beaumont. "We're findingthat compensation is less of an issue for employees and that growth and career development are more important," he says.

    If CoreTech University sounds like an extravagance, consider this: The company used the curriculum to create CoreTechInstitute, which has been sold as a separate for-profit training organization (renamed CTI) that offers courses to the public,particularly to chief information officers and information technology managers. (CoreTech still offers in-house training, butnot through CTI.)

  • Employee growth. Bob Kirkpatrick, CoreTech's chief people officer (yes, that's his real title), estimates that the companyspends approximately $4,500 annually to train each of its approximately 350 employees. However, he says, it's money wellspent. Employees can use CoreTech's training to become officially certified, for example, as a project manager or aMicrosoft-certified systems engineer. Every employee is required to take (primarily on company time) technical and "softskills" training courses that are linked to the company's overall mission. For instance, a course in project management is tieddirectly to the company's quality goals.
  • Reduced turnover. Douglas Palley measures the success of his "university" through the significant drop in turnover atUnitel, his call center company in McLean, Va. Since he started Unitel University a few years ago, average monthly turnoverhas dropped from 12% to 6%, a dramatic change for a company staffed primarily by low-wage employees. "Unemploymentin our area was 1.5%. We were looking for ways to improve retention and morale and to give people a career track," saysPalley, whose company reported $12.2 million in 1997 sales.

    As part of Unitel U., entry-level employees can take courses such as computer training and customer service through a varietyof self-directed study programs, or they can take courses at a local university. Palley spent $150,000 on the program the firstyear. Judging by the decrease in turnover, he concludes that Unitel U. is "very close to the break-even point."

  • Better employee advancement. After 90 days at Unitel, newcomers are eligible to become "freshmen" at the university andcan take several more hours of classes beyond their initial orientation courses. If they pass, they receive a raise of up to 8%of their pay. Then, every 90 days, employees can take more in-depth courses in telephone sales, customer service, andcomputer skills. When they successfully complete each level, they earn another raise of up to 8%. Criteria for passing arerigorous, says Palley, and "if they're late twice in a 90-day period, they have to start that level over again." The program isn'tmandatory, but employees know that training is the quickest path to increased pay and responsibility. "It's been an outstandingrecruiting tool," says Palley.
  • A wider talent pool. Jane Callanan, vice president of human resources at i-Cube, a Cambridge, Mass.,information technology consulting services company that reported revenues of $42 million in 1998, credits her company'sinternal university with easing the heavy burden of recruiting 155 people in two years. "The hiring landscape was pitiful,"she recalls. "We wanted to tap into college recruiting, to hire people who were very bright but didn't have several years ofwork experience." A five-week, 9-to-5 program, called i-Altitude, staffed primarily by senior managers, allowed thecompany to hire workers with little experience, then give them the technical training they needed to serve clients. "It reallyopened the labor market for us," says Callanan. "We can hire physics majors with a 3.8 grade point average but nocomputer science training. After five weeks, they're ready for a project. You can't do that without a good educationalprogram."