Tuition Reimbursement
Vanessa Lewis
XCOM 285
09-04-2011
Suzanne Delger

Tuition reimbursement is a good way to attract employees that are looking to further their education. Companies see it as an opportunity to retain their employees and increase job performance and loyalty. In order to get what you want you have to give them what they want. However, it is really up to the employee if he or she stays with the company once he or she has earned their degree. There are many things that we have to look at when it comes to tuition reimbursement because it may help a company meet their short term turnover goals, but really could go either way. Most want to better themselves in some way; tuition reimbursement encourages those that are unable to pay for college. It is easier to make that choice when employees know there is financial help available. Also, knowing that they can then move forward in the company helps the employee and the employer. As adults, one has to work and someone can come in do the same job that you do and make more money than you do just because they have a degree to go with their skills. When most employees even think about pursuing a degree, it is because they are looking for more income. Having a degree opens up the door for employees to earn more money on the job that they already love. On a weekly basis, someone with a high school diploma, on average, earns $507. Some one with a bachelor’s degree, on average, earns $834 a week, a master’s degree, $983, a professional degree, $1,174, and a doctoral degree, $1,214 (Dohm, A., & Wyatt, I. (2002). College at work: Outlook and earnings for college graduates, 2000-10). Does tuition reimbursement retain employees? Cappelli (2004) investigated this question by conducting a national representative survey. The survey showed that tuition reimbursement programs actually have a lower turnover rate on average than those without some form of educational assistance. However, a study of workers within a single company, Benson, Finegold, and Mohrman (2004) found that the likelihood of turnover decreases while employees are in school but increases after employees earn bachelor’s degrees in communication or business. Based on a survey conducted by past president of the Aslanian Group, Carol Aslanian and the senior vice president of Education Dynamics’ Market Research Services Division, found that only about 15 percent of undergraduates and 20 percent of graduates across the country over the age 25 use tuition-reimbursement benefits to help pay for their education. Yet 55 percent of these undergraduates and 70 percent of these graduates worked full time. About 70 percent of employers nationwide offer some type of tuition reimbursement to full time employees and 40 percent to part time employees (Enrollment Management Report; Jul2010, Vol 14 Issue 4, p. 3). Carol Aslanian’s research also showed middle management, administrative staff, clerical staff, and senior management are the ones that take advantage of these programs. It also showed that about 40 percent of companies felt as though education and training are important, while the another 45 percent said that those things are very important (Enrollment Management Report; Jul2010, Vol 14 Issue 4, p. 3). Also most companies only offer coverage if the degrees they are in search of are job related. If the degrees are job related, the company stands a better chance of keeping the employee. If for some reason the employee wanted to pursue a different degree, the employer would be less likely to offer tuition reimbursement.

Source: National Compensation Survey, March 2008, Bureau of Labor Statistics As you can see tuition reimbursement is a successful program that some companies benefit from. Employees benefit the most because they have help with their tuition, improve their skills, opens up doors for promotions, and gain more money and other benefits. Once an employee gets their degree they become more confident in their job, which leads to a definite improvement in job performance. Tuition reimbursement may cost the company a little money, but it the long run the company and the employee reaps the benefits. The company now has a skilled professional accompanied by a degree, which increases the employee’s job performance and makes the company look good. The employee is now making more money, which makes a happier employee. Everybody wins!

References:
Benson G, Finegold D, Mohrman S. YOU ARE PAID FOR THE SKILLS, NOW KEEP THEM: TUITION REIMBURSEMENT AND VOLUNTARY TURNOVER. Academy of Management Journal [serial online]. June 2004; 47(3):315-331. Available from: Business Source Complete, Ipswich, MA. Accessed September 4, 2011.
Attract more working adults through tuition reimbursement programs. (2010). Enrollment Management Report, 14(4), 3. Retrieved from EBSCOhost.
Pattie, M., Benson, G. S., & Baruch Y. (2006). Tuition reimbursement, perceived organizational support, and turnover intention among graduate business school students. Human Resource Development Quarterly, 17(4), 423-442. Retrieved from EBSCOhost. https://www.phoenix.edu/uopx-knowledge-network/articles/employer-success-stories/online-programs-tuition-reimbursement-produce-successful-graduates.html Dohm, A., & Wyatt, I. (2002). College at work: Outlook and earnings for college graduates, 2000-10. Occupational Outlook Quarterly, 46(3), 2. Retrieved from EBSCOhost.