Tuition Assistance Programs as a Strategic Investment: The Importance of Measurement

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​Dorothy Martin, Workforce Development Consultant 

Dorothy MartinDorothy Martin's background and experience has focused primarily on designing and implementing learning and development programs within the telecommunications industry and establishing educational partnerships with public and private institutions of higher education. For more than 30 years Dorothy was involved in workforce training and development, and during this time she successfully managed several corporate tuition assistance programs that directly benefited over 200,000 employees. To meet key business strategies at Verizon Wireless, Dorothy established customized onsite and online certificate and college degree programs funded through the company's tuition assistance program. She continues to provide business consulting regarding the design, implementation and effective use of tuition assistance programs in the corporate and higher education sectors.

One of the most important ways that HR professionals demonstrate their own leadership within their organizations is by developing other leaders. In today's world this preparation has to involve knowledge and skills development through education. However, many organizations hesitate to invest in tuition assistance programs because of fears that the costs are overwhelming and that the employees who benefit from such programs will not stay with the organization long enough for the company to enjoy a full return on investment.

This is why measurement is so important. Not only are the benefits of education substantial, but when seen as an investment the returns can also be considerable. My experience helping organizations develop and measure the return on investment of their tuition assistance programs over the past 10 years has convinced me that especially when looking at the impact of tuition assistance in reducing turnover, companies can cover the majority of the costs of their tuition assistance program.

The best way to invest in your business is to invest in your employees by providing excellent training programs and opportunities for higher education. A generous tuition assistance program will assist you in becoming an employer of choice for recruiting purposes, as well as help you reduce turnover, increase job productivity, and improve career mobility for employees who take advantage of the program. Tuition assistance programs can also be tied to other corporate business objectives, such as developing specific skill sets, creating talent management strategies and managing leadership development programs.

But to take full advantage of your investment in tuition assistance, it is necessary to examine the business impact in a systematic way. The four key areas you will need to focus on are:

1. Recruitment

2. Retention

3. Career mobility

4. Job performance 

For example, collecting data on the impact of tuition assistance programs on position acceptance rates can show to what extent such programs act as a recruiting tool. As the Millennial generation (born 1981–1996) and even Centennials/Gen Z (born from 1997 to the early 2000s) begin to enter the workforce in greater numbers, these types of programs are likely to become an even stronger element of your employer brand.

Likewise, poor retention rates are an expensive problem for many employers. Survey data examining the impact of the LearningLINK tuition assistance program at Verizon, for example, showed that the general workforce was more than twice as likely to leave the company as those participating in the tuition assistance program, even after degree or program completion.

Collecting data on career mobility can also show a measurable impact on the bottom line through increased rates of promotional and lateral moves that benefit both the employee and the organization. And participation in tuition assistance programs has also been shown to have a positive effect on factors such as employee job satisfaction, decision-making abilities, leadership and management skills, productivity and technical skills.

Managers and supervisors also report improvements in employee behaviors such as an increased interest in personal career development, interest in seeking out and accepting leadership roles, greater interest in internal training opportunities and in additional work assignments, and increased adaptability to change.

To maximize these benefits, it is important to leave nothing to chance and to approach tuition assistance in a strategic way. Specific steps to do this include:

  • Setting up a monthly/quarterly measurement model to help assess the business impact of the program (this requires dedicated resources).
  • Promoting the tuition assistance program to employees (embed continuous learning into the corporate philosophy).
  • Making the program easy for employees to access and use (allow online application processing; no service commitments on the front or back end of participation; prepaid tuition as opposed to reimbursement; a meaningful cap rather than a token amount of coverage; local support personnel to encourage and assist employee participation).
  • Developing a consistent communication link to the participants (monthly newsletters, annual college fairs held on site at the business, internal website, frequent internal PR promotions).
  • Establishing a graduation recognition program (notes of congratulations from senior leaders, a small gift, monetary compensation or stock options, team luncheons, website photos, testimonials).
  • Providing career opportunities upon degree or program completion (make graduation data available to internal departments and talent management teams, establish mentorship programs).
  • Partnering with a college or university to develop specific programs of study tied to your business objectives.
  • Seeking educational institutions that are willing to be flexible and offer reduced tuition and costs for participants in your program.
To create a measurement model, you must have the following data available:

  • The cost of turnover in your business (costs of advertising, recruiting, background checks, hiring, training, ramp-up time to full productivity, etc.).
  • Comparative data from your internal HR database (employee numbers and profile data, turnover stats, job performance ratings, job transfer data, etc.).
  • Utilization metrics of your tuition assistance program (participant numbers, tuition costs, administrative costs, course and degree stats, graduation and program completion records, etc.).
  • Survey data from your tuition assistance participants and the supervisors/managers of those participants (program satisfaction ratings, on-the-job behavioral influences, job performance observations, etc.).
By taking these steps, HR leaders can push tuition assistance programs far beyond being simply another employee benefit. Instead, these programs can become an integral part of an organization's human capital and leadership development strategy—one that continues to pay dividends years into the future.

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