Getting Your Head Around Tuition Aid as a Benefit

Candidates love to see Tuition Aid on your recruiting brochure.  Employees love to know that it is available.  But does it work in retention?  Most would say yes, but there's been little actual evidence to support the assumption.  A recent citing in the Wall Street Journal found a connection:

"A new study by a Stanford graduate student found attrition much lower among participants  in a tuition reimbursement program at a unnamed not-for-profit organization. The results support a Wharton School study that found tuition reimbursement programs appear to select "better-quality employees" who stay on the job longer. Last year, 85% of 1,000 larger employers offered some form of educational assistance. One of the more successful programs is that of United Technologies. About 12% of the company's 72,000 US employers are enrolled in the program. According to the company, turnover among those in the program is lower than the rest of the workforce." (The Wall Street Journal, 21-May-2007, Central ed., p. B4)

Couple of observations about this from my end.  First up, I think the United Technologies example is the exception rather than the rule.  One of the complex things about Tuition Aid is that while it is an attractive benefit, it is hard to use.  People have kids, other obligations, etc., so it's hard to go back to school while you are working - think of that as a natural barrier to entry.  With that in mind, the figures I have seen at most companies are in the 3-4% participation range.

Next up - do you drive retention through a payback agreement?  Most companies I am aware of do - usually for a rolling period of one year from the date of each reimbursement associated with the program.

Finally - the most important component of the program from a retention standpoint probably has to address the perception of "underemployment".  After all, once the employee grabs the degree, the customer service or entry-level marketing job doesn't seem so meaty anymore.  With that in mind, your program needs to find opportunities for new graduates who matriculated through your Tuition Aid program.  That's tough for companies to accomplish, especially smaller ones.

One note - I worked for BellSouth Mobility (now Cingular, soon to be AT&T - gotta love consolidation) in the mid 90's and went back to school via their Tuition Aid program to grab my MBA.  Upon graduating, I left in a hurry to enter consulting (no payback agreement!).  However, two years later, they recruited me back.  How they treated me with Tuition Aid and other programs was a big reason for the quick boomerang, a point not unrelated to the concept of retention...   

Comments

[Larry]

Good article, you make a great point about companies having new opportunities for those completing degrees through Tuition Aid programs, I worked in sales for a small-medium organization, I networked with the CEO to gain access to a management position if I completed an MBA, once completed I realized I made more money in sales than most of the management staff, I left the organization about a year later for a higher payer sales job that required a high level of business acumen (which my current company did not have to offer). So buy paying for my MBA the organization inadvertently encouraged me to leave.