5 Ways to Improve ROI on Tuition Assistance With an Education Benefits Platform
Fortune 1000 companies spend more than $20 billion on educational assistance programs, a clear indication that most savvy business leaders are recognizing “education as a benefit” as a powerful tool for employee retention. Education benefits historically catered to aspiring executives on the path to an MBA, but now, companies are expanding their tuition assistance programs to frontline workers, seeing a myriad of positive outcomes when educational benefits are offered to the employee populations with the highest turnover.
For example, an analysis done by the Lumina Foundation with Cigna found $1.29 in savings for every dollar spent on education reimbursement, a 129-percent return on investment. Similarly, Guild Education research in the retail and food service sector has found that employees enrolled in education programs were nearly twice as likely to stay in their jobs compared to employees not enrolled in a program. These working students were also more than four times as likely to be promoted than their peers.
Here are five ways to increase the ROI on your tuition assistance program with a technology-enabled education benefits platform.
1. Implement an end-to-end education benefits platform that tracks meaningful data.
Few companies have the data to track the impact of a tuition assistance program on recruitment, retention and promotion. Without the right data or tools, turning a tuition assistance program into a human capital initiative remains a challenge. Implementing an end-to-end solution helps companies collect meaningful data, track ROI and demonstrate how outcomes -- from retention to promotion -- align with key business strategies.
2. Swap tuition reimbursement for tuition assistance.
Most frontline employees cannot afford to front tuition costs while waiting for a corporate reimbursement. As a result, far too many take out expensive payday loans to use tuition reimbursement or simply pass on the benefit altogether. In response, forward-thinking companies are implementing direct billing plans to pay the cost of the education directly, eliminating the need for employees to pay up front. This single change makes using tuition assistance benefits a feasible opportunity for many low- and middle-income employees.
3. Provide access to a variety of education programs.
The educational needs of frontline employees are diverse; employees in the same role look for everything from a bachelor’s degree to a skills bootcamp to a GED program. Yet many companies have historically only offered one or two programs and faced the complexities of managing an exclusive university partnership when it may or may not have been the right choice for their employees. A comprehensive education benefits platform can help employees find the right program for their aspirations and busy lives.
4. Recognize on-the-job learning with college credit.
For the average American employee, what he or she learns on the job -- as opposed to in a classroom -- is more important today than ever before. A few innovative employers are beginning to connect the formal training work of L&D teams with the employee-driven learning happening through tuition assistance and education benefits programs. For example, at the large health care company DaVita, patient care technicians who complete the company’s intensive STAR training can earn as many as 21 college credits toward their degree. There’s a dual retention win here: College credit is a powerful motivational force, and students who receive credit for prior learning are 2.5 times more likely to graduate than those who do not.
5. Provide employees with an education support system.
Frontline workers face a wide range of challenges -- both inside and outside the classroom -- when they go back to school. A platform that connects students with coaches to help them navigate their educational experience, balance work and school, and stay on track to graduation is critical for students who may not be able to access their school’s advising services during regular office hours. Often, a coach is instrumental in guiding student-employees through the process of navigating the college process and succeeding semester after semester alongside the responsibilities of work and family life.
The ROI of tuition assistance is now evident for employers that are choosing a modern, comprehensive education benefits platform, providing a major win for employees, HR leaders and the company.
Rachel Carlson is co-founder and CEO of Guild Education, a technology platform and partner helping employers offer education as a benefit to their frontline employees. She and Guild’s co-founder were recently selected for Forbes’ 30 Under 30 list.