The Bottom Line: Business’ Investment and Involvement in Education Can Lead to Big Rewards

Jul 8th, 2011 By: Stacie Allen
Topics: Economic Development, Blog

 

Alarmingly low graduation rates and the related forecast for under-qualified future employees are huge challenges facing business today.  That’s why business and industry leaders are bringing their gifts and expertise into the schools to help generate the products they need: a strong pool of well-trained, highly-qualified workers.

The stakes are high for everyone involved.  Students who dropout suffer lifetime consequences that range from limited earning potential and dependence on social services to life-long health and wealth issues.  Schools operating on reduced budgets lose even more when students walk out and don’t come back.  Business ultimately absorbs the costs of an unqualified, underprepared workforce on their bottom line:

  • U.S. companies spend $1 billion a year on turnover and costs to replace an employee
  • According to the U.S. Department of Labor, the cost of mis-hiring (based on wasted salary, benefits, severance pay, headhunter fees, training costs, and hiring time) are:
  • Entry Level - $5,000-$7,000 after three months
  • Supervisor -- $20,000 salary costs $40,000 over a year
  • Manager -- $100,000 salary costs $300,000 over a year

According to the Organization for Economic Cooperation and Development, for the first time in New Mexico’s history, we have a generation that is less educated than the previous.  A lower percentage of adults 25 to 44 years old in the state hold college degrees (two-year or higher) than those 45 to 65.  The state of affairs in New Mexico is further compounded by a recent report from the Public Education Department that revealed graduation rates in the state are increasing (up 1.2% to 67.3%) but still places New Mexico at 49th in the nation.

Those in the scientific fields have seen the shortage of qualified candidates coming at them like a tidal wave.  Some of the finest minds in our country are hitting the retirement age, and there are simply too few equally qualified young people to replace them.  Jamai Blivin, president of Innovate+Educate, said the critical need for highly-qualified STEM (science, technology, engineering, and math) graduates is creating a national security crisis.

 

In response to this need, business is stepping into the conversation on improving educational outcomes in a significant way.  Two national examples of this include:

  • The Gates Foundation led by Microsoft’s Bill Gates is pouring millions of dollars into developing a network of Early College High Schools, among other investments in innovative education models. 
  • Some large comprehensive high schools around the country have been turned into smaller “career academies” focused on training students for specific career fields and use curriculum developed in partnership with local businesses.  These businesses are shaping the training of their future employees, ensuring that graduates have the foundational knowledge they’ll need to be successful in their careers.

Here in Dona Ana County, that partnership with and commitment from the business community began with the education committees of the chambers of commerce, became the Regional Education Initiative and now continues through The Bridge of Southern New Mexico.  Since 2007, some of the county’s top business and industry leaders have been working alongside the top educational leaders to build a strong, sustainable approach for helping young people hit those critical completion points:  high school graduation, two-year college degrees, career certifications and/or four-year degrees or higher.

Their investment is why we have what may be the only public high school in the state with no dropouts (Arrowhead Park Early College High School), double the number of students taking dual credit courses, and a comprehensive mentoring program currently in development.

Recently, the business community increased its commitment to the county’s youth even more by investing in The Bridge financially.  These organizations are leading the way by supporting the strategies and partnerships that will build a stronger future for youth, families, the economy, and the county at large.   Thanks to Las Cruces Machines, Pioneer Bank, NewTec, Citizens Bank of Las Cruces, Northrise Ventures, Adventure Travel and the Mesilla Valley Economic Development Alliance for making this ground-breaking commitment to building better pathways for youth success. Other businesses are joining in, as well, and we’ll look forward to making those announcements soon.

So why is this investment a good one so good for business?  When one student stays in school to graduate, just one, the county gains between $4,000 and $14,000 in additional income and between $3,600 and $12,700 in additional spending and investing each year.  By contrast, one dropout costs society between $250,000 and $450,000 over his or her lifetime.  When you consider that there are almost 58,000 youth under the age of 18 in Doña Ana County, those numbers add up quickly.

If you are interested in joining The Bridge’s work, give us a call at 575-528-7092.