Top 5 Ways Businesses Realize ROI from Tuition Benefits
Businesses are trying new ways to attract and retain talent such as, offering huge sign-on bonuses or offering higher starting salaries for entry-level positions. However, the most innovative businesses are doubling down on their employee reimbursement program (ERP). According to SHRM’s 2018 study, 51% of employers offer tuition reimbursement programs to employees. The Wall Street Journal reports that less than 10% of workers at companies that offer tuition reimbursement use the benefit. Those employers that are promoting education as a benefit are having better luck attracting and retaining talent making this workforce development strategy the most rewarding and cost effective to the bottom line.
Here are 5 reasons why ERPs benefit businesses:
#1 A two-year study showed that education reimbursement programs have a 129% return on investment (Lumina Foundation).
More recently, businesses have been forced to reduce services or to cut production goals because they do not have enough employees to fill vacant positions. Companies that can’t find a way to get people back to work are going to continue to see profits decline and may be forced to shutter their business. Businesses that highlight these reimbursement programs in the position listing and in hiring advertisements are seeing more interest and more applicants applying for each position. Giving employees the gift of an education inspires hope for a better future in the minds of prospective employees.
These ERPs also provide future benefits because as the workers complete their degree programs, they are able to think critically and innovate on the job, providing an even greater incentive to the business in the long run. ERPs also provide qualifiable cost avoidance opportunities because the educated worker is more likely to get promoted and less likely to leave an organization which provides education as a benefit.
#2 Recruitment and retention, during the Great Resignation, are going to challenge businesses. (NBC News).
Businesses are trying new ways to attract and retain talent because the pandemic caused a reassessment as to what is important in life. People who would have stayed in a position that made them unhappy before, are more likely to seek out careers that align with their interests and values. Employers need to recognize this employee mindset change and to see it as an opportunity to create a learning community that will inspire more personal growth and will illustrate the value the employee brings to the business.
When a manager taps an employee on the shoulder and encourages them to get an education, it builds a connection of caring that is difficult to match with other HR benefits. An education is something that goes with the employee and positively impacts all aspects of their life, including their personal life. It is a true investment in the employee first and the business second, therefore the employee feels more loyal to the business because they know they are valued and they feel more positive about their life, even outside of work. This well-rounded global citizen goes about the community representing and building a positive image about the company and its brand.
#3 There is a mismatch between employers in-demand skills and the availability of workers skilled to fill those positions (Harvard Business School).
Creating an opportunity for the employee to see a pathway to a sustainable skilled career will provide the entry-level talent needed and the word-of-mouth pipeline to bring an increased number of applicants. This grass roots process will also increase the production output for the entry-level talent because each worker will feel inspired that they have an opportunity to move into a better position in the future. They will work harder to ensure future advancement.
Preparing workers for skilled positions should be only the beginning of the educational journey for employees. Employees need to be given the opportunity to grow and advance in their career at every level, even when they work in highly skilled positions. When employees feel they don’t have an option and they are performing a job because they “can’t afford to leave”, it doesn’t help the worker emotionally to become the best version of themselves. In the end, the company will suffer by losing their skilled workers and the company will be forced to pay higher talent acquisition costs to find and train new employees.
#4 88% of Gen Z workers say they are more likely to recommend their employer because of its education benefits (Bright Horizons).
Younger workers understand that businesses need to provide incentives to keep them, and they are more likely to share positive and negative information on social media. Therefore, it is important to consider affordable incentive programs, like tuition reimbursement, to help attract employees of all ages, but most especially Gen Z workers.
#5 Improves communication, conflict resolutions, and it builds a sense of community (CBNation)
Imagine a world where groups of employees, from different divisions, are collectively reading about Socrates or learning about Maslow’s Hierarchy of Needs. This will make conversations at the water cooler and in meetings much more interesting and engaging. The classroom has a way of bringing people together, even when employees have nothing else in common. The shared experience allows for social and emotional learning, which improves the culture and provides a competitive advantage for the business. A strong learning culture leads to better working conditions, less turnover, and a happier working environment.
When you create a Community of Learning, your employees feel a sense of hope about future. They begin to understand teamwork and collaboration, they learn to embrace their differences and to recognize them as strengths. This process works even better if the shared experience is in person. The students learn more, and they have the opportunity to fully embrace the content. Furthermore, not everyone has a computer or has the ability to learn online. When your employees have the opportunity to know and understand their colleagues, there will be less conflicts and more caring which will positively impact the bottom line.
For this reason, Dream2Career is ushering in a new kind of embedded learning experience for employees of small and medium businesses. In collaboration with local colleges and university partners, we are offering an enhanced tuition reimbursement solution that is personalized, site-based, and provides a fully immersive college experience for employees. Businesses now have a tool that will attract and upskill talent in a socially responsible way, enhancing employee loyalty, and positively impacting the working environment.
Why An On-Site Cohort Model Works in Businesses:
Convenience: More employees will use the Educational Reimbursement Program (ERP) if the courses are offered onsite, with their colleagues directly following the end of their shift. They do not need to find transportation and they will look forward to the in-class engagement.
On-Site Support: Offering a site-based cohort program, with on-site tutoring and support, will improve retention and student completion rates.
Employee Value: Allowing employers to use their current employees to train and fill high need positions will help businesses to compete in global markets and it will raise the standard of living for their employees.
If you are interested in learning more about this project, reach out to Dr. Kathleen Houlihan firstname.lastname@example.org.