Tuition reimbursement programs are quickly becoming a sought-after benefit for employees.
Workers in many fields look for continuous education and allowing students to gain new skills can give companies a competitive edge.
These employee benefits can provide positive results for both workers and the companies that employ them.
Below are statistics and research to outline the effectiveness of tuition reimbursement programs
- Worries over automation and student debt causes a huge demand for reimbursement programs, outranking paid/sick vacation leave and retirement benefits (Bright Horizons, 2019)
- 71% of U.S. organizations offer tuition assistance to their employees (EdAssist, 2012)
- 26% of organization offered some form of employee reimbursement (World at Work, 2019)
- In 2019, employee scholarships, student aids, and loans had the biggest increase in education-assistance offerings out of 13 other benefits offerings (World at Work, 2019)
- Company provided student loan repayment benefits have risen from 4% in 2018 to 8% in 2019 (SHRM, 2019)
The Cost of Tuition Reimbursment
- Employers can offer employees $5,250 of educational assistance tax-free each year (IRS, 2020)
- Employers spend $177 billion annually on formal education and training (College Is Just the Beginning, 2015)
- A two-year study showed that education reimbursement programs have a 129% return on investment, that means for every dollar the company invests it generates an additional $1.29 (Lumina Foundation, 2015)
- Annually, the United States spends $1.1 trillion on formal and informal post-secondary workforce education and training (College Is Just the Beginning, 2015)
- Employers spend 58% of their formal training budget on college-educated workers (College Is Just the Beginning, 2015)
- Manufacturing organizations spend on average $535 providing 27 hours of training per employee (ATD, 2014)
- Healthcare organizations had an average spending of $1,394 and provide 24 hours of training (ATD, 2014)
- Finance, insurance, and real-estate spend on average $1,107 and provide 33 hours of training (ATD, 2014)
- The manufacturing industry accounts for 11% of workers, but 14% of spending on formal training (College Is Just the Beginning, 2015)
- Compared to their size in the economy, construction, retail, and services invest very little in formal training (College Is Just the Beginning, 2015)
- Most respondents (82%) said the skills or degree earned through their employer’s tuition reimbursement program helped be a more effective employee, and 84% feel it helped them prepare for the future of work (Bright Horizons, 2019)
- Tuition-assistance program participants reported 89% increased confidence in ability to perform on the job, 94% reported that the knowledge was useful to their job (Ed Assist, 2012)
- 76% of employees said they are more likely to stay with their employer because of its tuition reimbursement benefit (Brighthorizons, 2019)
- ERP participants are 10% more likely to be promoted, 7.5% more likely to receive an internal transfer, and have an 8% higher retention rate (Lumina Foundation, 2015)
- ERP participants are 43% more likely to be paid more (Lumina Foundation, 2015)
- 88% of Gen Z workers say they are more likely to recommend their employer because of its education benefits (Brighthorizons, 2019)
Participation in Tuition
- Less than 10% of workers at companies that offer tuition reimbursement use the benefit (The Wall Street Journal, 2018)
- Large organizations on average provide more training than small and midsize organizations (ATD, 2014)
- 76% of tuition reimbursement participants participated in a tuition assistance program for assistance or growth opportunities, and two–thirds participated in learning new skills (EdAssist, 2018)
- In 2014, organizations spent 10% of their external services budget for tuition reimbursement, and 27% on consultants, workshops, and training services (ATD, 2014)
- More than two–thirds of organizations’ formal learning hours involve an instructor, and 25% of the training hours used were completed through an online course (ATD, 2014)
Continuous learning is a benefit that helps employers retain their employees, and it also improves the work of employees. For a benefit that can help a company as much as it helps workers, employers can investigate which tuition reimbursement companies can help facilitate these programs.