Investing in employee education works. This is why large companies across nearly all industries commit revenues to employee tuition reimbursement, student loan repayment benefits, in-house education and certification programs and other corporate education initiatives.
Each year, Fortune 1000 companies commit over $20 billion to various kinds of employee education programs. In all, 71 percent of U.S. employers provide tuition assistance to employees, according to research by Deloitte. 82 percent of these large firms measured the return on investment of their employee education benefits. Most tellingly, they continued to provide those benefits and even expand them.
In the long run, it nets money.
“We have seen a 20% to 40% increase in retention with employees who are enrolled in an education benefit program versus their peers who are not,” claims Zoe Weintraub, director of business development at Guild Education, an education benefits firm.
“We are offsetting [tuition cost] by making sure employees take advantage of federal financial aid, which is typically $5,900 annually,” Weintraub said. “If the company is able to retain the employee for at least six months longer than other employees, the company is able to capture those savings, which could be up to $3,000.”
Another study, sponsored by the Lumina Foundation, looked at health insurance company Cigna’s program and found that every dollar invested in employee education benefits netted about $1.29 in cost savings thanks to lower turnover and reduced recruiting expenditures.
Discover Financial Services finds investing in employee higher education results in $1.44 in savings for every $1 invested in employee education benefits. Accenture, with funding from the Lumina Foundation, looked at Discover’s tuition reimbursement plan and found the investment in education for employees already in house netted 44 cents on the dollar through increased promotion rates and retention and much improved absenteeism. Employees who participate in the program received pay raises that were on average at least 41 percent greater than workers who did not participate – indicating that in the aggregate, these employees were worth it.
The Deloitte study also found that 88 percent of employers offering a tuition assistance benefit aligned the benefit with their recruiting and retention objectives.