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When it Comes to Job Placement Rates, It’s All About the Numbers

Published:  November 10, 2011

[Today at Higher Ed Watch, we are running the second of two posts looking at the question of who's to blame for job placement rate abuses at for profit colleges. Click here to read the first post, which ran on Wednesday.]

Kathleen Bittel was ready for a change.

For 16 months, Bittel worked as an admissions counselor for Education Management Corporation’s Argosy University. Under constant pressure to meet her enrollment targets, she felt she was doing more harm than good to the lives of the students she admitted. So when the opportunity to transfer to EDMC’s Career Services Department arose, she jumped at the chance.

Becoming a career service adviser in the online division of EDMC’s Art Institute brand meant taking a hefty pay cut. But Bittel was willing to do it because she saw the new job as “an act of penance” for the work she had previously done as a recruiter.  She believed that in her new post she would finally be able to help students achieve their dreams. Her excitement, however, was short lived.

“At first, I found it very rewarding to have the opportunity to get to know and work with the industrious graduates of the Art Institutes who were actively seeking a better life. I felt I could provide valuable assistance in helping students find good jobs in a poor job market,” Bittel said in testimony she delivered at a Senate Health, Education, Labor and Pensions Committee hearing a little more than a year ago. “But that feeling did not last long. I realized it was all about hitting quotas instead of really helping students find meaningful work.”

In a separate letter to the Senate Committee’s chairman Tom Harkin and other panel members, she wrote, “What I found in Career Services was even more deceptive than the recruiting practices.”

Where the Real Fault Lies

As we’ve previously written at Higher Ed Watch, there is growing evidence that a substantial number of for-profit college companies, both big and small, have deliberately misled prospective students and regulators about their record in placing graduates into jobs.  When abuses have been unearthed, the companies invariably blame them on “rogue” employees. But the truth is that at many of these companies’ schools, the drive to inflate job placement rates comes straight from corporate headquarters.

At these institutions, career service advisers are constantly in a frenzy to meet the aggressive placement targets set by the companies’ leaders. They are regularly reminded that their continued employment depends on meeting their quotas. Just as in recruiting, employees who bend the rules to achieve their numbers are richly rewarded. Those who miss their targets have their pay docked and know that their jobs are at risk.

So is it any wonder that these advisers count any and every job their graduates get as a successful placement, even if the former students are flipping burgers at McDonalds or serving coffee at Starbucks because their training didn’t pay off? Or that they include graduates in their rates who worked for as little as a day? Or that some even falsify or fabricate employment records altogether? (See here for some of the most common tricks of the trade.)

Kathleen Bittel is just one former career services adviser. But her experiences show the unrelenting amount of pressure that is placed on employees to pump up these numbers by any means necessary.

Learning the Tricks of the Trade

Soon after Bittel started her new job, a co-worker took her aside to show her a trick of the trade: how to alter graduates’ employment records to ensure that they count as being placed. As an example, the adviser pulled out a document that a recent graduate had submitted showing earnings that were too low to be considered a “successful placement.” The co-worker then tossed the document into the trash and created a new one using average salary data from the website Salary.com for the relevant position.

Bittel says she was outraged and reported the incident to her supervisors. But instead of being disciplined, the staffer received an award shortly thereafter for being a star performer. The message this sent was “abundantly clear,” Bittel told the Senate committee. “Employees who hit their numbers will be rewarded regardless of whether graduates actually succeed, or whether the information entered truly represents the graduates’ circumstance.”

Bittel wanted to perform her job honestly but found it nearly impossible to do so. The company expected career advisers to help place about 86 percent of the online art students they were assigned into jobs related to their field of study within six months of graduating. Because there were only five advisers in her division, Bittel had to work with between 150 and 180 students and graduates during each reporting period. Employees who met their targets received a $3,000 bonus each quarter.

Despite her best efforts, Bittel had trouble meeting her quota, and the pressure placed on her only continued to grow. “I was constantly reminded that my numbers were not as high as they wanted them to be.” One quarter, she fell short by just one tenth of one percent. As a result, “the company docked $500 from my bonus and I was told that I could lose my job if I failed to meet October’s goal.”

The situation “culminated,” she said, when she was abruptly called one day into a meeting with her bosses:

The head of the department interrogated me, asking the same questions over and over. ‘Why were my numbers the lowest on the team, and why did I think that everyone else had the numbers he wanted and not me?’ He demanded that I provide him with a plan on how I intended to meet his number, reminding me that my job was in jeopardy should I fail.

She soon reached “the breaking point of my conscience due to the constant pressure to do things I felt to be morally unethical,” and took a leave of absence from which she never returned.

Pumping Up the Numbers

But why would for-profit college companies go to so much trouble to inflate their job placement rates?

For one thing, state regulators and national accreditation agencies generally require for-profit colleges to place between 60 and 70 percent of their students in jobs in the fields in which they trained to remain eligible to participate in the federal student aid programs.  A failure to meet these thresholds could, in other words, be a death sentence for the schools. As a result, these institutions have a major incentive to do whatever it takes to keep these rates high.

For another, high placement rates are an essential recruiting tool for bringing in students. Most students are attracted to these institutions on the promise that they are going to get a good job that pays well.

But for some for-profit college executives, there is even a greater incentive for inflating these rates -- their bonuses depend on it. This was the case for EDMC, at least in 2006, according to a Securities and Exchange Commission (SEC) filing from that year that Higher Ed Watch has obtained. That document shows that “the short term cash award bonuses” that EDMC’s leader received that year depended on the company achieving a specific placement rate and average salary amount for its graduates. “Performance above or below target is increased or reduced by 4 percentage points for each 1 percent difference between plan and an actual performance,” the filing states.

There is, of course, an argument that basing bonuses on placement rates is beneficial because it gives company executives a buy in to the success of their graduates. But it also gives these officials a major financial incentive to do anything they can to pump up these numbers.

Given Bittel’s experiences, is there any doubt about which of these outcomes really motivates them?

Next week, we will complete our job placement rate series. Stay tuned.


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