Not Just a Perk: How Clear ROI Is Driving Tuition Assistance Programs


Posted In: Workforce Insight

Apr • 5 • 2017

Calculator with message - how a clear ROI is driving tuition assistance programs

Tuition assistance programs are nothing new, but the way organizations use them as a tool for talent attraction and development has been slowly shifting over the past few years. As the economy rebounds, workers don’t historically head back to school to top up their qualifications. But with more employers competing for top talent, organizations are upping their benefits packages to include education.


According to the 2015 Employee Benefits Survey from the Society for Human Resource Management, 56 percent of employers offer undergraduate tuition assistance, while 52 percent offer tuition assistance at the graduate level.


We predict that the value of tuition assistance programs will continue to be felt by organizations of all sizes, resulting in some very interesting shifts as this space develops.


An increasing focus on ROI


While tuition assistance programs have long been considered an important part of the employee benefits package, an increasing number of organizations are starting to see their programs not as an employment perk, but rather as a business investment. From this perspective, more companies are starting to take a hard look at the data around their programs.


Lumina Foundation has been developing a series of studies looking at tuition assistance programs at major employers, all of which have documented significant ROI. This one from Cigna, for example, demonstrates the benefit to employers — saved talent management costs of $1.29 for every dollar spent on employee tuition.


As the use of big data for decision making continues to extend into talent management, companies will be able to measure and target their tuition assistance programs more effectively.


Aligning tuition assistance to talent development needs


As companies see a more definite ROI from tuition assistance programs, they will be able to target them to specific needs within the organization. Health insurance company Aetna is a key example. As new technologies and self-service options transform the role of customer service representatives, Aetna has been faced with the need to upskill their frontline staff for the more complicated customer service environment. By promoting their tuition assistance program to these frontline employees, Aetna is future-proofing their workforce.


Other companies are using tuition assistance to build a talent pool better able to step into middle management positions. One way they’re targeting specific groups is through better communication of their policies, pulling information about continuing education options out of obscure corners of their employee benefit sites, and putting them in front of employees for the most impact.


The flip side of this more targeted messaging is that some companies are now starting to treat tuition assistance more like they would a scholarship, by including a qualification process such as an essay. Though not ideal from an accessibility standpoint, the trend helps companies be more specific about the business needs they’re meeting.


More on this topic: How Tuition Assistance Is a Powerful Lever for Your Diversity Strategy


Expanding which programs are covered by TAP


In the past, tuition assistance programs have only allowed students to study at traditional institutions like the local state university or community college campus. That’s beginning to change, as many organizations consider innovative online degree programs from nonprofit institutions that design degrees specifically for working adults who need new skills to succeed in their careers.


And many employers are considering other credentials. As education as a whole begins to break into more accessible bite-sized courses and credentials, companies will be able to use their tuition assistance programs to target learning specific to their workforce — such as communications with a concentration in healthcare or management with a concentration in public administration.  


However, most organizations see more value in their employees having broad-based degrees, rather than pursuing only specialized training for a single role. Companies such as Amazon have made headlines for this recently, with their Career Choice program, which pre-pays 95 percent of tuition for hourly employees to earn degrees in high-demand fields — even if the degree isn’t related to their jobs.


More on this topic: How Competency-Based Education Gets Results for Learners and Employers


The key? Forging relationships with educational institutions


In order to realize these trends, companies must get better at communicating their programs to employees and connecting them with educational institutions. While some companies are starting to provide tuition assistance in a way that doesn’t require employees to decode their benefits package’s fine print, there are still many hurdles.


As the landscape of higher education continues to evolve, more employees are expecting tuition assistance as an opportunity. Organizations that may not have had tuition assistance on offer in the past are now competing against organizations that do.


Forging relationships with educational institutions and third-party educational benefits providers is one way to help communicate policies more clearly, and many high-profile companies are doing just that. Is your company ready to embrace these trends in tuition assistance programs? Get in touch with College for America today to learn more about our competency-based online degree program.


Read more about how major employers are using online competency-based degrees to help their employees grow.