Educational Assistance Programs Lead to Career Success

Employers are continuing to add or expand programs for tuition reimbursement, according to a new report, Educational Assistance Benefits: 2015 Survey Results. But while these programs are valued by the employees who participate in them—and by employers that value talent development and increased employee engagement—only a small percentage of employees actually use this benefit when it’s available.

Yet for those who take advantage of this offering, their career advancement can be dramatic.

The report’s findings are drawn from a survey of U.S. employers conducted earlier this year by the nonprofit International Foundation of Employee Benefit Plans (IFEBP) among its members and those of its sister organization, the International Society of Certified Employee Benefit Specialists. The results reveal that 83 percent of the polled organizations offered some sort of educational assistance or tuition reimbursement benefit to their employees. Their top reasons they gave for offering educational benefits were to:

• Retain current employees (52.1 percent).

• Maintain/increase employee satisfaction and loyalty (42.6 percent).

• Keep employees current on evolving skill sets required for the organization (41.1 percent).

• Attract future talent (26.6 percent).

• Maintain/increase innovation (14.2 percent).

• Maintain/increase productivity (13.5 percent).

Almost 75 percent of organizations said their educational assistance offerings are successful.

“Educational assistance benefits resonate with employees who love to learn and sharpen their skills. Organizations looking to attract and keep key talent find this a great benefit offering,” said Julie Stich, CEBS, research director at IFEBP.

The survey found that respondents mostly offer educational assistance to their full-time salaried and hourly workers. More than one in three respondents also provide these benefits to their part-time salaried and hourly workers. The most common type of coursework covered is undergraduate degree courses (88 percent), followed by master’s degree courses (87 percent) and associate degree courses (69 percent).

Although the benefit may be offered to many, few employees use it: At many organizations, less than 5 percent of employees take advantage of educational offerings.

An employee taking advantage of this benefit will most commonly receive a fixed-dollar amount of $5,000 to $6,999 annually, but most organizations require that employees give something too:

• 79 percent require employees to earn a minimum grade, such as a C or better, for course reimbursement to apply.

• Nearly half of organizations require payback of funds if an employee leaves the company before a specified period after the completion of coursework.

“Educational assistance benefits are a win-win,” said Stich. “They work as a recruitment device and cost-effective way to grow a workforce’s knowledge and skills. This benefit is especially of interest to Millennials, who are looking for opportunities to learn and advance in their careers.”

Despite the low utilization of the benefit, the future of educational assistance programs looks strong. Only 2 percent of organizations surveyed plan to decrease their emphasis on educational benefits over the next five years, while 29 percent of respondents are expecting to increase their emphasis.

Helping Hand

Joseph Kolakowski, CEBS, director of risk management, compensation and benefits at the Philadelphia Parking Authority (PPA), helped to draft the agency’s educational assistance policy. He also developed partnerships with area colleges and universities so employees, and in some cases, their family members, can attend at a reduced rate.

“All of our employees who are full time, who have completed their six-month probationary period, are entitled to receive $5,250 to use at any accredited post-secondary place of learning—college or vocational—per calendar year,” he explained to SHRM Online. “Employees with excellent attendance and an above-average performance review—and typically those two go hand in hand—qualify to get as much as $7,875 within a calendar year.”

The agency has 975 regular full-time employees; currently, 25 of them participate in the plan, or about 2.5 percent.

“Unfortunately, that’s a small percentage. It does baffle me, because it is a very generous benefit and it’s open to so many people,” said Kolakowski. “There is an awareness we do offer the program, and people can go to school for practically anything.”

Kolakowski noted that “A lot of our employees are blue-collar, many of them are high school graduates and they work here full time. They may have families and be raising children as well. But there are so many different ways for an employee to go to school these days—including through online courses and the like—that we hope to encourage more people to take advantage of it.”

Onward and Upward

At the PPA, “If somebody passes a course that’s pass/fail, or they earn an A or an A- if it’s graded, we reimburse 100 percent of the cost of tuition and fees [not including books]. If anybody earns from C- to B+, the reimbursement is 90 percent on tuition, plus full reimbursement of other fees. We don’t pay for Fs or Ds,” Kolakowski explained.

He noted several instances of how the program has benefited workers. “One employee started out at the agency as a processing specialist, went to school for computer and information sciences and earned his degree, and now he’s a system administrator, a management position. In another case, an individual started at the agency as an accounting clerk, subsequently earned her bachelor’s degree and [master’s degree in business administration] here, and now she’s a senior staff accountant with the agency.” Additionally, “One of our division attorneys earned both her bachelor’s degree and J.D. while here at the parking authority working full time.”

In other cases, employees have “moved on and taken their education with them, and that possibility is understood,” Kolakowski said. “But most people who take advantage of the program do stay, and typically they take courses related to the work they do. They earn recognition, which is often followed by promotion.

“There is certainly no downside for employees who apply themselves,” he noted.

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow me on Twitter.

Related SHRM Articles:

In Focus: Student Loan Assistance, SHRM Online Benefits, September 2015

529 College Plans Offer Another Way to Save, SHRM Online Benefits, June 2015

Starbucks and McDonald’s Expand Educational Opportunities, SHRM Online Benefits, April 2015

Direct Contracting: A New Approach to Education Benefits, SHRM Online Benefits, December 2014

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