Retaining Top Talent with Tuition Assistance Programs
You might think that insurance and paid time off are two of the most sought-after job benefits, and you’d be right, but there is another perk that many of today’s leading companies offer that allows them to hire and retain some of the most qualified and passionate emerging professionals It’s tuition assistance, and your business could finally start to build the team you’ve been dreaming of by incorporating this benefit into your operations.
How Companies Benefit
Investing in employees’ education benefits both parties. For the company, it leads to greater tax breaks, the possibility for free part-time workers and reduced turnover rates. While it may not be feasible to ensure everyone you hire stays onboard for the long-haul, paying a portion or all of an employee’s college education while securing their job security post-graduation is one way to keep most of your staff loyal. In terms of professional development, 87 percent of millennials cited it was one of the most important qualities of a potential employer.
Many tend to leave positions for two reasons: more money or better opportunity for growth. In some cases, people will even take a smaller paycheck if it means they have a greater chance to develop new skills and advance in their field more substantially. When an employee earns their degree while working as part of a tuition assistance program, your company is able to help them build the skills they need to earn a promotion almost immediately upon graduation. They benefit from this opportunity while your business is able to lower recruitment costs and promote from within.
The Difference Between Assistance and Reimbursement
Both terms refer to the employer-sponsored benefit that covers a portion or all of an employee’s degree. This could refer to undergraduate, graduate or doctorate degrees, and every business can determine what types of programs and course material they will cover. You do not have to cover the entire cost of someone’s education, and even a small percentage can be a tremendous help to students. Those who are entering graduate school to further their professional opportunities can take out private student loans to pay for their education while also taking advantage of their employer’s assistance program.
In terms of what you actually provide coverage for, the disciplines, degrees and even specific classes are up to your discretion. You may choose to also pay for any lab or research fees and book costs or leave those to your employees’ personal finances. To prevent employees from exploiting the opportunity, you may integrate a payback agreement that requires any worker who leaves the company before a set period of time to return any funds that they received as part of their reimbursement program.
Hiring and Keeping the Most Talented Professionals
A reimbursement program can help any company both attract and retain highly skilled and dedicated employees. The IRS allows a business to write off up to $5,250 per employee each year. You can choose to offer more, but you will have to pay payroll taxes on any amount exceeding this limit. The ultimate goal of the program is not to just pay for someone’s education but rather create a team that is committed to advancing your company. Their skills and knowledge are designed to not just benefit their lives but help the business reach its objectives. With so many students graduating with loans, any form of tuition assistance is an enticing offer.
How to Set Up a Reimbursement Program
You’ll need to address both budgetary and practical concerns with your finance and HR divisions prior to creating a tuition assistance program. You want to ensure that the company is able to benefit both financially and professionally from the incentive. A strategic plan that aligns the organization’s goals and values with its assistance offerings will make it easier to create a framework that works for the scale and nature of your work.
Establish criteria for prospective participants to meet, such as having a certain amount of experience or providing routine copies of transcripts to ensure exemplary academic performance. There will also need to be guidelines in place that specify exactly what type of classes and degree programs are covered under your reimbursement program; you can even decide to modulate your assistance rate based on grade point averages, which further incentivizes employees to do their absolute best while they’re in school and on the job.
Ben SteenstraCo-founder of TheONEFree
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