The (still) untapped potential of tuition assistance
No one should be surprised that training expenditures have dropped. Bersin & Associates estimates that 2008 training expenditures were 11 percent below 2007 levels. This severe recession means funds available to develop future leaders will continue to shrink.
Meanwhile, the tuition assistance benefit continues to be funded but is managed under “benign neglect.” Most organizations administer this pool of capital simply by having the employee’s supervisor sign off on reimbursement. This is a lowest-common-denominator form of management — hardly strategic.
A January study conducted by Bersin & Associates titled “Tuition Assistance Programs: Best Practices for Maximizing a Key Talent Investment” documents the wide use of this nonstrategic approach.
The study notes that tuition assistance programs “are a nearly universal employee benefit. Yet, despite best intentions, [they] are not generally leveraged strategically, and are not aligned with talent management and employee development initiatives.” This is benign neglect run rampant.
While benign neglect is the general case, some large organizations are strategically managing this precious resource — a resource rendered even more precious as a result of the immense cost pressures created by this recession. Other organizations are struggling to align key parts of the organization to innovatively use these funds.
At Verizon Wireless, tuition assistance is employed as a strategy. The company provides a retail management program to employees under the company’s LearningLink tuition assistance program. More than 18 percent of Verizon Wireless employees attend more than 1,800 colleges and universities and use the LearningLink benefit.
Dorothy Martin of Verizon Wireless presented the educational program at Corporate University Week in Orlando in November. The most revealing thing came in a response to a question from the audience: “In the face of the severe cost pressures created by this recession, doesn’t Verizon Wireless senior management demand that you cut LearningLink expenses?”
The questioner essentially wanted to know if Martin was facing the same pressures to reduce expenditures for learning and development that the rest of the industry is facing. Martin’s answer was: “No, we are not feeling those pressures. In fact, our leadership wants us to expand the education coverage to include 20 percent of the workforce.”
The reason Verizon Wireless wants greater use of LearningLink funds is because it knows it is a good financial investment. How does it know? Monthly, Verizon Wireless senior management reports document the financial and organizational impact of LearningLink. The company’s learning strategy produces net value for the corporation on four key business parameters: recruitment, retention, job mobility and job performance.
This result is consistent with a recent survey I conducted with 40 learning leaders. The survey question was: “If you were able to demonstrate measurable business impact, would your organization invest more in education and training?” All of the respondents answered yes. The difference is that Verizon Wireless is measuring and reporting the impact.
Home Depot provides another good example of strategic use of tuition assistance. Leslie Joyce, Home Depot’s former vice president of learning, presented her program at The Conference Board’s Enterprise Learning conference in February.
The challenge was to help Home Depot create a leadership pipeline for the approximately 45,000 leadership positions within the company. Joyce pointed out that the existing internal training programs were unable to scale to a level required to serve the demand the company has for future leaders.
While most organizations are still struggling to make tuition assistance a strategic investment, a few have gone beyond best practices to true breakthrough. These innovators are strategically deploying tuition benefits to help fill the critical pipeline of future leaders.