ERIC Identifier: ED270138
Publication Date: 1986-03-00
Author: Deegan, William L.
Source: ERIC Clearinghouse for
Junior Colleges Los Angeles CA.
Should Your College Start a Center for the Delivery of Contract
Training Programs? ERIC Digest.
One of the most important trends in higher education over the past decade has
been the increased linkages between colleges and other organizations, especially
those linkages with business corporations. A principal form of linkage, and one
that seems to hold enormous potential as a future force in higher education, is
contract training. This development has been driven by the recognition that more
effective attention to human resource development is an imperative if
organizations are to remain competitive.
Community colleges have been at the forefront in providing contract training
programs, though four-year institutions are showing an increased level of
interest and activity in contractual arrangements. A recent study by Deegan and
Drisko (1985) found that 70 percent of a representative national sample of
community colleges is actively engaged in providing contract training programs.
The programs tend to be offered at the job site (65%) and not for college credit
(60%). The principal clients are businesses (69%), health care organizations
(14%), and government agencies (13%).
In addition, many state governments are beginning to provide resources for
these programs as an incentive to attract or retain business and industry. The
North Carolina Legislature appropriates funds to the State Board of Community
Colleges for a variety of contract programs (Kopecek and Clarke, 1985). In New
York, more than 450 companies were served by 345 contract courses in the first
two years of a new contract training program established in 1981. A 1983 law in
Iowa offers incentives to businesses that use community colleges to train
employees for new jobs. Iowa officials hope to attract 4,000 new jobs to that
state in 1985 (CHRONICLE OF HIGHER EDUCATION 1985).
THE "CENTER" CONCEPT
As a consequence of the demand for and growth of contract training programs,
there has been heightened interest in creating special "centers" to market and
deliver these programs. These "centers" may be called by various names such as
"management center" or "business institute," but the concept remains the same.
By creating separate centers to market and deliver contract training
programs, colleges can capitalize upon the enhanced image and public relations
value of having a specialized organizational unit. Most corporate
representatives also like the idea of dealing with a single center rather than
working with several units of the college for different contract programs (the
A contract training center usually has an executive director, some clerical
and support staff, and a cadre of part-time instructors who are available to
teach on a contract fee basis. A few centers may even have additional
professional staff to handle what are essentially sales and marketing
activities. Many centers also may have a board of directors or an advisory board
made up of business leaders. The income-generating potential of centers for
contract training is significant and, in many large cities, it seems to offer
enormous possibilities. One of the centers reviewed in the study by Deegan and
Drisko (1985) had grown 75 percent in four years and was generating over one
million dollars in income in l985.
POTENTIAL BENEFITS AND PROBLEMS OF CREATING AND EXPANDING CONTRACT CENTERS
Contract training centers may offer significant benefits over and above the
income they generate. The potential to improve the image of the college and
enhance relationships with the powerful and important business community is
significant. Contract training programs may also lead to (1) new opportunities
for full-time faculty to broaden experience; (2) donations or sharing of
expensive equipment; or (3) new ideas for curriculum development and student job
Unfortunately, the rapid growth of contract training programs and centers may
also lead to some significant problems. Finding qualified instructors who will
competently and professionally represent the college can be problematic,
especially if programs are expanded too rapidly and do not allow for adequate
recruitment and screening. If this is the case, a college may find that contract
training programs do more harm than good. In addition, the college may have
significant problems in responding to corporate needs quickly and in providing
materials and facilities that match corporate expectations. Another problem is
resistance among full-time staff who may believe that contract training programs
and centers water down traditional academic offerings and unnecessarily drain
CONSIDERATIONS IN CREATING A CENTER
In response to the question "Should your college start a center to deliver
contract training programs?", the answer is yes, but only if a number of
significant policy issues are thoroughly analyzed. The potential benefits of
contract training centers have already been reviewed, and the contributions to
the economic development of the community and the nation outweigh the potential
problems. However, college administrators thinking of starting a management
center should carefully consider the following issues in order to help maximize
the benefits and minimize the problems:
1) College Staff Must Carefully Analyze the Role and Goals of a Center for
Unfortunately, many colleges embark on contract training programs without
effectively reviewing the potential impact of these programs on institutional
mission, values or reward systems. Many programs grow in an ad hoc or piecemeal
fashion that can lead to the same kinds of problems that some corporations
experience when they expand too quickly. College personnel need to ask the
classic question "What business are we really in ?" They need to consider the
place and priority of contract training programs within the total college plan
as well as the kinds of "risk capital" that the college is willing to allocate
to support contract training programs and centers during the early stages when
costs exceed income. Agreement on target results expected after one, three and
five years (and provision of adequate resources to meet those targets) will help
in the development and management of an effective contract training center; it
will also foster a critical analysis of the role the center will play in the
future of the college.
2) There Is a Need to Develop Separate Advisory Structures for
Representatives from Business and the College
A necessary complement to the lay advisory board is the creation of a
separate board consisting of faculty and administrators from the college. Many
centers do not have these kinds of boards, yet they can be especially helpful in
clarifying roles and opportunities for the college, in conducting evaluation
programs, in heading off problems, and in winning support and involvement from
full-time staff who may become involved in center activities. It is not likely
that representatives from business will want to spend a great deal of time on
internal college concerns. Their contributions will be most helpful in
developing and marketing programs. The creation of two advisory boards may be
time consuming, but it may pay rich dividends once policy and program structures
are in place.
3) Center Staff Should Have a Strong Business Background
Business executives often have stereotyped impressions of the academic world
-- impressions that are not always favorable to potential contract training
providers. An ideal executive director of a center for contract training should
have experience in both business and education. Center directors need to be
especially skilled in understanding the needs of business, in negotiating
contracts, and in being a good manager and public relations person. While any
personnel decision is an individual one, strong consideration should be given to
recruiting someone who can effectively relate to the business world. This may
require some extra investment in salary, but it is an investment that should be
4) College Staff Need to Develop Policies on Center Profits
Colleges starting contract training centers should establish policies
regarding profits and retained earnings. Staff need to decide whether to pursue
a uniform profit margin or to charge what the market will bear for contracts.
They also need to consider what to do with profits -- return them to the central
budget, retain them in the contract training center, or devise some sharing
arrangement. The sharing of profits may be the most attractive concept because
it provides an incentive for staff to generate business and share in the rewards
of successful contracts. Shared profits can be used for equipment, travel or
center expansion costs. Profits could also be shared with staff in a bonus or
merit pay system; but while this might provide a strong incentive for center
staff, it might create problems with other units of the college. Issues related
to profit margins and the distribution of profits are explosive ones that should
be the subject of careful policy analysis before centers are started. Otherwise,
administrators may create dissatisfaction within their own staffs as well as
with their clients.
The development of separate centers to market and deliver contract training
programs is an idea that is currently gaining a great deal of attention at
colleges across the country. Along with opportunities, separate centers may
present some serious problems. Careful consideration of the issues raised in
this Digest can help provide an important focus on the critical decisions that
should be made as future directions in contract training are contemplated.
FOR MORE INFORMATION
Deegan, W. L., and R. Drisko. "Contract Training in Community Colleges."
COMMUNITY AND JUNIOR COLLEGE JOURNAL 55 (6): 14-17.
Kopecek, R., and R. Clarke. (Eds.). CUSTOMIZED JOB TRAINING FOR BUSINESS AND
INDUSTRY. New Directions for Community Colleges, no. 48. San Francisco:
"Two-Year Colleges in Iowa Designed to Lure 4000 New Jobs to the State."
CHRONICLE OF HIGHER EDUCATION, January 30, 1985, p. 3.