Straight A's for Tuition Benefits:
In a cash strapped economy, tuition benefits get more strategic.
By McLean Robbins
November 1, 2008
According to a recent study by the Institute for Corporate Productivity, 81% of organizations offer some form of tuition assistance program for employees. Other statistics say upwards of 90% offer this benefit.
"Employers have traditionally seen tuition reimbursement as a 'nice to do' benefit," says Carol Sladek, global work/life consulting leader for Hewitt, "but in today's economy, organizations are rethinking the benefit, taking a more strategic viewpoint."
Jay Jamrog, senior vice president of research from the Institute, agrees, "Better run companies look at tuition reimbursement as a competitive differentiator." It is sometimes less about the amount of money offered and more about the program itself - does it include career and educational counseling and a smooth reimbursement process.
Teacher's pet: best practices
Jamrog says that part of having a successful program involves a clearly defined procedure and purpose. He suggests benefit managers follow five steps to implement, market and track programs:
1. Establish the program's purpose. Is it to retain and/or engage employees? Improve their skills?
2. Establish metrics and measure whether the program is meeting its stated purpose.
3. Communicate and market the benefits to employees.
4. Consider recognizing achievement for those employees that complete a program. It increases morale of an entire team and of the individual.
5. Align the benefit with your talent management programs. If the program is not completely voluntary, adjust reimbursement accordingly.
Tracking ROI
Data suggests that as few as 5% of companies track return on investment from tuition benefits.
"Most businesses have no way to track return on investment, let alone how much they're spending," says Michael London, president and CEO of College Coach, whose firm offers a program to make Tuiton Assistance more strategic. London's firm estimates that corporations spend upwards of $20 billion each year on tuition benefits and that 10% of employees are using the benefits each year.
Most companies don't follow even the most basic of data. A mere 26% track retention rates, and even fewer track graduation rates (23%) and professional advancement (15%).
London says that much of this is due to a divide among departments over who owns responsibility. A third of companies say that the benefits department handles tuition programs, while others say the training and development department owns the opportunity.
By placing tuition benefits in the talent development arena, it allows for more cross-development opportunities, says London. The program can be more fully integrated into overall corporate strategy by incorporating former graduates and company employees into a mentor program or by leveraging the participation of multiple students from the same company into a potential tuition discount, says London.
There's always the fear of giving employees the skills to succeed and getting paid back with two weeks notice instead of loyal employees. But despite the legitimate concerns, employers are generally forced to pursue a "live and let live" policy. Mandating that employees remain a certain portion of time after a degree is complete is generally difficult, if not impossible, to enforce, experts say.
It's important to have written policies governing payback (whether companies pay up front for a degree, or mandate a certain grade level for reimbursement) in order to govern efficiency, but beyond that, employers have generally done what they can. It's up to employers to design programs that allow employees and their newly honed skills to continue to develop in such a way as to retain employees.
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