PLEASE VISIT OUR SPONSORS

Compensation & Benefits

Published April 2008

Using Tuition Assistance as a Tool for Recruitment and Retention

 

  Daniel Margolis

For  many, an employer paying for its employees' education might seem like just a nice idea, a courtesy or amenity to be offered if time and resources allow. But more and more talent managers realize tuition assistance can be a tremendous recruitment, retention and development tool.

Heidi Milberg, director of business development for General Physics Corp., an HR outsourcing firm, has seen this transition take place during 15 years supporting tuition reimbursement programs.

She said an employer's first step in administering a tuition assistance program is not determining how much money to provide employees, how to reimburse them or what qualifies for reimbursement. It should be identifying the goals or focus of the program, what the talent manager wants to achieve through tuition assistance. This can be affected by where the program is placed within an organization. Two likely homes for tuition programs — learning or the benefits group, which is typically HR — create different focuses. For instance, if the program falls within the learning department, it indicates a focus on workforce development.

"We're starting to see companies interested in the whole employee, from the time they're hired or recruited until the time they retire," Milberg said. "Tuition programs are more important when it comes to employee development and not just recruiting and retention. When it falls within the benefits group, it's disjointed from the learning and development side of it, and the focus is strictly on recruiting and retention."

Tuition assistance programs can have tremendous value for recruitment and retention, providing their benefits are not obscured by a compensation process where salary is more heavily prioritized. Laura Osborn, director of learning and development at industrial manufacturer United Technologies Corp. (UTC), said tuition assistance has served as an effective draw for her company.

"It's one of the main reasons people come to work for us," Osborn said. "When I look each year at who has started a new degree program, 30 percent of those new starts are people who have less than 12 months of tenure with us."

Even if a tuition assistance program is not the main reason a potential hire selects a company, a lack of one still can affect the decision.

"I wouldn't say it's a key differentiator if you have it, but it's a key differentiator if you don't have it," Milberg said. "If you're looking for a person just out of college from some of the best schools, it's a good recruiting tool for them."

UTC also has seen its tuition assistance program function well as a retention tool.

"When we look at overall workforce attrition, we retain folks who are either participating or have graduated with a degree through this program 4 percentage points better than the general workforce population," Osborn said. "We also look at promotion and see that people who go through these programs are promoted at about a 4 percent higher rate than the general workforce population. People who earn their degree may move from the position they're in but generally stay inside the company."