In today’s competitive economy – where attracting top talent is always a concern – tuition assistance is a valuable tool in an employer’s cache of perks. For many savvy companies, tuition reimbursement grants the opportunity to stand out from the crowd; shine a little brighter.
Here are five reasons why tuition assistance works – for employers and employees alike.
1. Recruit Top Talent
Becoming an employer of choice is fueled by many things: a great corporate culture, strong leadership, a lucrative benefits package, and more. Tuition reimbursement is one additional perk that is gaining in popularity for both employers and employees.
While tuition reimbursement not only signifies the obvious benefits that come with continuing education, it also can go a long way in helping employees feel valued.
While it may seem like a gamble, investing in employees’ educational growth illustrates a vested interest in their future – professionally and personally – which can be very appealing to prospective talent, especially to the growing and much-coveted crop of millennial graduates.
2. Elevate Productivity
By offering tuition reimbursement, an employer can boost in-house operational efficiency. After all, it makes good business sense to build upon assets currently in place rather than to start from scratch.
Helping existing employees with organization- and industry-specific competencies improve or adjust their skillset through education can ultimately translate into bottom-line benefits for business operations. Here’s another way to think about it: by offering tuition reimbursement, a company is closing the skills gap by helping shape the workforce to fit its specific needs.
3. Reduce Turnover
For companies trying to maximize operations, employee turnover can have profoundly negative effects on operations. If a company is spending its time finding, hiring, and training new people to fill open positions, it is likely veering away from the organization’s overall mission and vision. For these reasons and more, employee turnover has a direct impact on company revenue and profitability and can lead to a decline in an organization’s quality of product and services.
Furthermore, high turnover rates can fuel low employee morale as existing employees may be overworked and may have increased workloads and responsibilities due to a lack of an active or trained workforce. Utilizing a tuition reimbursement program will help ensure that an organization has the right type of skills in place which will, in turn, keep productivity at optimal levels.
4. Encourage Hard Work and Loyalty
According to many workplace studies, money is not everything for today’s employees. While money is certainly a big component to employee happiness, so are things like respect, approachable leadership, recognition, rewards, and opportunities to grow.
Offering a tuition assistance program illustrates a company’s commitment to its employees and helps ensure that employees will be poised for growth opportunities that arise within the company.
By providing employees the educational tools they need to be successful, companies will almost certainly see a long-term return on investment in the form of employees’ improved motivation, consistent productivity, and job satisfaction.
5. Save on Taxes
While there are myriad ways to institute a tuition reimbursement program, one thing is certain: it will not be cheap. That said, educational assistance programs allow employers to provide employees with educational assistance or employer tuition reimbursement of up to $5,250 annually which can be excluded from an employee’s income.
An educational assistance program lets employers claim a business deduction for educational benefits paid and they are not required to pay FICA or FUTA payroll taxes for benefits provided under the program. Eligible expenses include tuition, fees, and course materials like textbooks, supplies, and equipment.
Eligible expenses do not include the cost of a computer or other supplies that can be retained by the employee after completing the course of instruction.
Knowledge Is Power
There are many ways for companies to creatively cultivate the workforce they need for long-term success, and educational assistance is one of the most popular options to help do so. In fact, according to the Society for Human Resources Management’s (SHRM) 2018 Employee Benefits Report, 51 percent of employers offer financial assistance for undergraduate programs, and 49 percent have programs for graduate-level studies.
Tuition assistance can yield a variety of advantages to both employers and employees — and ways to provide tuition assistance are changing all the time. Perhaps one of the best things about education assistance in the workplace is that it’s a two-way street. By empowering employees to enhance skills, develop personally and professionally, and reach higher goals, employers should reap rewards in efficiency, quality, and morale, as well.