Straight A’s For Tuition Benefits
Copyright 2008 SourceMedia, Inc.All Rights Reserved Employee Benefit News
November 2008
QUALITY OF LIFE; Pg. 62 Vol. 22 No. 14
899 words
Straight A's for tuition benefits: Even in a cash-strapped economy, tuition benefits offer employers and employees a relatively low-cost, feel-good benefit that will keep giving long after the payouts end.
McLean Robbins
According to a recent study by the Institute for Corporate Productivity (ic4p), 81% of organizations offer some form of tuition assistance program for employees. Other statistics say upwards of 90% offer this benefit.
In theory, tuition reimbursement sounds like a benefit for both employer and employee - one that would be well-adopted and oft utilized by workers and employer alike. But can it be more as well?
"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, it's becoming an important recruitment and retention tool as well."
Linda Blandford-Beringsmith, vice president of human resources for global recruitment firm Robert Half International, agrees. She says that tuition benefits are "very important in terms of care and feeding of your employees. While it can be pricey per person, it doesn't turn out to be a heavily expensive burden to offer, because not all [employees] sign up for it."
"In better-run companies, it is one of those differentiators, especially in today's world, where it's very important to make the best and brightest to feel like the company cares for them and is wiling to invest in them," says Jay Jamrog, senior vice president of research at i4cp.
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.
It's fairly common for companies to restrict degrees to those that can be of use to the company at large, says Blandford-Beringsmith. For example, she says, an art teacher would likely not be permitted an advanced degree in aerospace engineering - but an aerospace engineer might be permitted to do coursework in graphic design, particularly if his or her firm had such a department.
Blandford-Beringsmith also disagrees with the assumption that only white collar organizations should offer tuition assistance. Helping blue collar workers obtain an associates or four-year degree can strongly influence loyalty and lead to greater corporate retention,
she says.
"It's about making [your
employees] more confident and
productive in their jobs,"
says Sladek.
Maintaining work-life balance
Experts agree that supervisors, managers and HR/benefits managers should work together to help design both overall policies and programs for individual employees pursuing tuition assistance. While few organizations grant sabbaticals for full-time study, most corporations encourage night or weekend programs geared towards adult learners.
Telework, flexible hours and other work-life balance programs can help employees juggling work and school, but should be considered a privilege and not part of the benefit package.
Tracking ROI
Data from i4cp suggest 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. London's firm estimates that corporations spend upwards of $20 billion each year on tuition benefits and that 20% of employees are using the benefits each year.
Most companies don't follow even the most basic of data, i4cp finds. 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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