Traditionally, corporate sponsorship has underwritten a large chunk of executive education, as companies throw their financial backing behind rising stars destined for a place on the board. That source of income for business schools is now under threat as participants report that employer funding is harder to come by.
Demand for executive education tends to track economic cycles. When the economy is doing well, companies are more willing to splash out on training for their senior managers. But in a downturn, revenues will dry up and employers will cut back on expenses.
“Some of the professionals who are interested in taking executive education courses tell us that they are finding it more difficult to obtain employer funding. They also report that in some cases it’s hard for them to make the time available, because they are so busy [managing a crisis],” says Nicole Kleyn, dean of executive education at Rotterdam School of Management.
That said, she believes forward-looking organizations realize that during these difficult times, employees will need new knowledge and skills. “We’re not seeing a change compared to before COVID-19; around 90 percent of our participants are funded by their employers,” says Kleyn.
The Dutch school also works with grant providers who seek to create impact by funding education. “We offer discounts for our alumni and self-employed professionals and, under certain circumstances, allow for payments in instalments,” says Kleyn. RSM also collaborates with UAF (a Dutch refugee organization) to offer executive education scholarships to refugees, to help them find suitable employment on the Dutch labor market.
Mixing funding sources to pay for executive education
It depends on the seniority level of the executive, but in general, participants at Iese Business School in Spain fund their courses through a mixture of company sponsorship, their own savings and bank loans. “Those in charge of a business function tend to be sponsored by their employers, as they typically have kids and mortgages,” says Yolanda Serra, global director of international executive programs. “When you reach general management level, it is quite an even mix between company support and personal funds. At board level, it is personal funds.”
Despite the economic downturn, she recommends asking for employer sponsorship. This can mean that your company grants you time to join the program, or that they partially—or even fully—pay for the course. “Those companies who had allowed remote work to be part of their working dynamics pre-pandemic, as well as those that had the liquidity to sustain the transition, have continued sending their executives to open-enrolment programs,” says Serra.
She adds that some European governments let companies reduce their tax bill when they pay for the training of their employees. But if you want to switch careers, she recommends paying for executive training with your own funds. Corporate sponsorship tends to come with strings attached, such as a commitment to stay at the company for a fixed period of time, or risk having to pay back part or all of the tuition fees.
“When a company decides to sponsor your executive development, it clearly shows their appreciation of your work and the contribution they think you could make in the future,” Serra says.
Some business schools have scholarships on offer for executive education
Most of the leading business schools have robust scholarship programs, according to Serra. Iese, for example, recently launched new scholarships for high-potential managers whose personal financial situation has changed as a result of the pandemic. The school also has scholarships for entrepreneurs, women in business and employees of nongovernmental organizations. Many students receive external scholarships too, and the school supports them in the application process.
In addition, some Iese students are eligible to apply for a loan offered by Banc Sabadell. The loan covers up to 80 percent of tuition fees. Deutsche Bildung, a private loan provider, offers loans to German students.
MIP Politecnico di Milano also has several loan agreements with financial institutions. But if you need to apply for a loan, you need to be sure the business school you choose will lead to the job opportunities and networking that will help you to quickly offset the financial investment that you are making.
Greta Maiocchi, chief customer management officer at MIP in Italy, says the benefit of executive education far outweighs the cost. “Employers have come to rely on executive education to fill skills gaps, solve challenges and meet business goals. It is also a great way for an employee to get exposure to the latest trends and business thinking.”
As a result, employees are often more engaged at work and, if they received corporate sponsorship, are more loyal too. Maiocchi says: “These are just a few of the many reasons — for both employer and employee — to invest in executive education.”