Investing in Education: The Graduate Academy Program - Kevin Osterhaus, Graduate Hotels

Josiah: What is the Graduate Academy program? And then I want to get into the backstory of how you built it and what you've seen so far from it.

Kevin: Graduate Academy is a program that we launched last year. Really proud of it. I believe it's a best-in-class offering that allows our team members throughout the organization to pursue undergraduate degrees paid for by graduates. It's a series of offerings through Graduate Academy. We will pay for undergraduate education if anyone on our team chooses to pursue it. We will pay for any one of thousands of university certifications throughout the portfolio of universities that we work with, whether it's related to your role with us or not. And these are real examples. Our folks in our engineering team are pursuing trade certification so that they can improve their role with us. We've got housekeeping team members who are pursuing human resources certifications. We've got people throughout our finance teams that are pursuing CPA certifications, so there is a lot of activity regarding certifications. As part of the program, Graduate Academy also will fund the pursuit of high school diplomas for our team members or their families. We will fund English classes for our team members or their families as part of this program. So really excited. I don't think a lot of companies, especially our size, are doing this, and I think it's best in class and pretty pursuant to our commitment to continuing education, given our mission in university communities around the world to continue to provide educational opportunities inside and outside your professional experience with us.

Josiah: Why does providing educational opportunities matter?

Kevin: For a couple of reasons, I think. One, when I started, just a little background, I was looking at the handbook and really proud. I even started working with my university, with my alma mater, to continue to support getting people excited about careers in hospitality and in anything that we could do as we work through what career training, higher education development looks like. As I was looking at our offerings for the 2,000-plus team members we have, I was kind of surprised that it was pretty boilerplate at that point. We offered up to $500 in tuition reimbursement if it's approved and you get a good grade, all that stuff. And I sent the team back to the drawing board saying, there has to be a bettering class. There has to be something we can do to hang our hat on our ability to provide opportunities for team members. And so they came back with this, this program in partnership with a company called InStride. InStride works with universities around the country. In order to do this and in the UK also we've got our hotels over there. And it was important for a couple of reasons. One, I think it's an industry we do a. horrible job getting people excited about careers in hospitality. I just think this is an area where collectively we've got a long way to go and I think if we can continue to focus on that, be innovative in our ability as an industry to ensure people are growing and developing and advancing their careers with us, post us, then that's important. I think maybe a little more selfishly if we can continue to support people's growth and development with us, they'll stay with us longer. They'll become loyal. And I think as an industry, there are many ways we could be driving loyalty, telling these stories, and continuing to grow a team member's tenure with us. But I thought this would be a great way to generate that type of longevity.

Josiah: Kevin, if I could, I'd love to ask a little bit about if I look at the roles that you've had across your career, you have a really interesting perspective on how the hospitality industry at large has done things. And many hotel companies will have some piece of a learning and development budget. And I think you touched on elements of this where it tends to be a relatively small amount of money invested, maybe, but are there other sorts of systemic things that you see in hospitality broadly, where it doesn't really provide educational, like real meaningful educational opportunities for people?

Kevin: I think it's like anything. As an industry, we have to recognize it's funny; as an industry, we made headlines, right? Hospitality made headlines post-pandemic on how difficult it was to find people in our industry. And so this is a collective issue as an industry that I also believe is relatively slow to adapt in general. It's important that we recognize that if we try to recruit if we try to tell the same stories we always have if we dedicate the same amount of time every day to building teams and finding new people and bringing talent in, then we're probably going to fail. We need to reassess how we're doing it. We need to get innovative on how we get people excited about careers in hospitality, jobs with us. And we need to shift our priorities in order to do that. And I think other industries have done that. Other industries recognize that there is A compelling story I think we have a wildly compelling story that is a over the course of a career often a disproportionate return if somebody sticks through it and works their way through the through the ranks and what other industries can boast that you can start with a dishwasher and end as a general manager or a CEO at some point. First, we just have to be aggressive in recognizing that things have to shift. And it is an exciting industry if we're telling that story.

Josiah: I love it. You spoke to a little bit about the early stages of setting up this program. You saw an opportunity to do something more. You asked your team to come back with what would it look like to do more? And then you put the whole package of offerings together. I wonder if you could speak a little bit more to how you set this up, the details of getting something like this started, because it's pretty comprehensive, as you alluded to earlier.

Kevin: I agree. And again, a company of our size, I'm pretty proud that we've offered this. And I don't, I think where you might get tripped up is looking at this as just an added expense. I look at this as a part of our benefit offering, something that is a compelling story to somebody trying to decide about coming to work with Graduate Hotels. And certainly, a compelling part of somebody trying to decide if they're going to stay with Graduate Hotels, it's certainly compelling to say, okay, this is a company that's investing in my development, my tenure, my advancement. And so when they came back, I started to look at the expense, and it's not inexpensive, and it's based on usage that we really couldn't afford not to be innovating in a few of these areas. And so I think we've made some smart decisions. We were able to figure out how the properties could continue to fund this, you know, based on our best guess and realize we're less than a year into this at this point. And, you know, we'll continue to assess where cost goes, what expense we're able to dedicate to this and how we can continue to offer innovative paths through this and, and continue to keep people engaged, whether it's continuing to provide certifications that allow us or allow a team member to grow with us, as I mentioned, you know, in advance their career, which is mutually advantageous or simply take advantage of this while they're employed with us in order to build something better for themselves. And more directly to your question, I just push back. We found the money, we allocated it to the properties how best we thought it was. We've now been through it a year. We're continuing to assess this. And similarly, we've done the same thing. We're building it into our benefit offering.

Josiah: I love it. I wonder if I could ask specifically about how you communicated what this offers your team members because I've seen some really interesting programs designed and then they kind of get stuck in the in the boardroom or the planning room and people don't aren't able to benefit from it because they don't know about it or they're not convinced. How did you go about communicating this such that you got the adoption that you have?

Kevin: We just went for it. The team that worked on it was just as excited as I was to be able to offer it. So a few different ways we quickly built it into our list of competitive offerings, what a career with Graduate Hotels looked like. We quickly started to communicate it to the teams. We set up roundtables around the country just so we could educate. The biggest threat at that point that I thought we faced was people not understanding what we were offering. How do we get it in front of team members at all levels throughout the organization, especially the ones that I believe would benefit from it most? And I hold quarterly town halls broadcasts to all of the team members throughout the company. We were very specific and focusing on this as an offering. Last year, for the second year, we were ranked among best employers, and continuing to build this narrative into our offering is just a big part of what we do. So this allowed us from handbook to execution to property level communication to continue training. We just continue to talk about it. We do the same thing with graduation. We've now had team members graduating from this program. We broadcast that. We make sure that we're recognizing those who have dedicated the time outside of work to accomplish some goals in this program.

Josiah: You've already touched on some of the results. The program's been up less than a year, so it hasn't been going that long. But what's interesting is to see you've already been named a Best Employer. I guess either anecdotally or is there a data point you're especially proud of at looking at the success so far in this early program?

Kevin: We've got a lot of engagement in getting people ready to take advantage of the program. I'd say about 10% of the company is actively involved in a certification or some educational course or some part of this program. Of those, 90% in surveys have increased their belief in the organization's commitment to their growth. just under 80% have increased their desire to grow with graduate hotels. Our turnover has gone down double digits. Our retention is up materially among people who have participated in these programs. So yeah, I'm proud of the metrics so far. I'm proud of the feedback anecdotally so far. I'm proud of what it allows us to do by way of storytelling. And we want to continue to find great ways to grow involvement.

Josiah: It's exciting to see that, Kevin, as such a new young program already delivering results.