Big Company Inc. decided to offer a great new employee benefit, create some basic policies for employee use and establish an administrative process that would track expenses. Big Company Inc. spent millions of dollars each year for this employee benefit.
by David Vance
September 28, 2004
What’s wrong with this picture? This story does not have a happy ending, because Big Company Inc. forgot to:
- Decide what the program should accomplish.
- Consult experts to design and annually review and update the policy.
- Appoint specialists to manage the program, rather than employing “fund and track” measures.
- Link the program with company goals.
- Establish measures for accountability to reduce costs and demonstrate ROI.
- Provide support for employees.
Think such a lack of planning or evaluation could never happen at your company? Well, think again. Unfortunately, this little story probably describes your existing corporate tuition assistance plan. These “oversights” are costly and would not be acceptable anywhere else in your company. So why are they tolerated? Simply put, nobody’s minding the store.
Management of tuition assistance programs should be given to learning specialists instead of HR/employee benefits departments. Employee education is vital to keeping a workforce functioning at optimal levels. College education is a requirement for leaders. Proactive succession planning for recruiting and retaining good employees is a must, as is the advancement of minorities within your company. Most companies don’t have a clear mission for tuition assistance and often forget that it was established so employees might obtain knowledge and skills that benefit the enterprise. Many companies just focus on the “process,” because those who have ownership of this employee benefit plan are in the “process” departments—HR/employee benefit administrators.
Tuition assistance is part of employee development and should be the responsibility of the CLO and employee development directors. Benefits departments are always swamped with crisis issues and don’t devote the time and talent needed to tuition assistance. The clerical necessities of the tuition assistance process (verifying employee eligibility, IRS compliance, process, bookkeeping) should stay with HR/benefits departments or, better yet, be outsourced to one of a dozen companies that offer these services. The policy, budget and strategy should be given to corporate learning specialists who understand learning concepts, adult learners and corporate learning goals.
As baby-boomers start to retire, tuition assistance will become the employee benefit to keep qualified workers in the pipeline. It can support your corporate employee diversity initiatives and give minorities and union-represented workers the credentials needed to advance their careers. Training courses should be evaluated to grant direct college credit for equivalent learning. There are several ways to achieve this credit conversion, and consultants can assist in this process. If a company does not incorporate tuition assistance planning into its entire learning strategy, then the CLO should spearhead this change. The value of employee education programs can be squeezed far beyond their present status if tuition assistance programs are shifted from a fund-and-track perspective to a business-model outlook.
Tuition assistance plans must be measured for accountability. Here’s something that will please your controller—a tuition assistance program’s costs can be reduced and its ROI measured. Once tuition assistance falls under the responsibility of learning specialists, many new initiatives can be accomplished.
More adults are returning to learning. About 50 percent of all national college enrollments are adult learners, which equates to about 7.5 million students. Most adults returning to learning receive corporate sponsorship.
College tuition increases about 15 percent each year, and so do tuition assistance plan budgets. American organizations spent about $10 billion on college courses last year. How much does your company spend? It may not be so easy to find out.
Your tuition assistance dollars are fighting an uphill battle—the more use by employees, the greater the costs. Here are some recommendations to enhance this employee benefit:
- The tuition assistance policy should be updated and should include the opportunities higher education has afforded to the adult student. These include testing for college credit, on-the-job and life experience credits (portfolio), college credit for military training courses, online learning, accelerated courses, “credit banking” and much more. Many of these options reduce the time needed to complete degrees and reduce costs. The policy should be reviewed often and revised to reflect the changes in higher education. The language of your policy should be evaluated to reduce risk of abuse or legal ramifications.
- Your employees are given full responsibility for spending corporate dollars for educational providers, but they have no centralized information or professional evaluations to help them make those decisions. Your employees find information about education providers from advertisements, friends or college representatives. Think about it: Are these the best resources of information for employees to rely on as tens of thousands, hundreds of thousands or even multi-millions of your corporate dollars are spent on their education? It is estimated that about 20 percent of tuition assistance plan costs are misdirected expenses. Colleges are bombarding your employees with advertisements and recruiters (salespeople) to lure them into their institutions and increase their revenues. Tuition assistance dollars can only be held accountable by conducting individual employee evaluations of learning needs, as well as assessments of past learning and abilities. Only then can a tailor-made plan of study be designed for employees (and their managers) to follow, which will safeguard your company’s financial investment and support employee success.
- Companies are at risk of losing all of their investments in tuition assistance if they do not recognize and utilize their college graduates. It is impossible to promote all employees who receive their college degrees. Yet, employees who seek higher learning are ambitious. Education does increase their creativity, critical thinking and communication skills, as well as develop their knowledge of a particular subject area—such as accounting, marketing, IT or management. So, exploit those learners and graduates! They want you to. While earning their degrees, companies can use these employees for special projects matched with their studies. Encourage employees to solve company problems for term papers and research. Those employees using tuition assistance plans should be listed in a company-wide “pool of potential applicants” with their date of projected graduation, degree and newly acquired expertise, so that managers can select these employees for projects, and know when they will complete their degree for cross-training or departmental transfers. Graduates should be recognized for their accomplishments with notices in corporate newsletters, awards or special meetings hosted by executives or the CEO.
The value of tuition assistance can be stretched only if learning specialists begin to direct this vital and necessary employee benefit. It’s time tuition assistance planning be given the same analysis, evaluation and direction as is given to training curriculum and training dollars. The CLO is the one who can make a happy ending.
E. Faith Ivery, Ed.D., is president and CEO of Educational Advisory Services Inc. (EASi) of Scottsdale, Ariz. Since 1981, EASi has provided services to Fortune 1000-level companies to reduce costs and increase the ROI of corporate tuition assistance programs. www.E-A-S.com.