When we talk about voluntary benefits employees want, tuition reimbursement occupies a special place in the minds of many workers. College costs continue to rise and student loan debt is a national conversation which seems to spark many arguments but little change. Why should employers handle the challenge of expensive secondary education for workers? Let’s look at some of the benefits to employers.
Retention and Recruitment
This is perhaps the most obvious benefit: American workers want this perk, and they’re willing to take—and stay at—jobs that offer an opportunity for higher ed. Data gathered by EdAssist found that 84% of employees surveyed said access to tuition reimbursement was important in their decision to join a company.
Chipotle shared that their upfront tuition program participants boast a retention rate three and half times higher than those who don’t participate in the program. Other companies report similar boosts in retention. It’s a win-win for employers.
Identifying Motivated Employees
Studies show that participation in tuition reimbursement is generally only about 10% of a company’s workforce. Human Resources experts point out that this small number can help leaders identify the most driven, motivated employees on your teams. Companies can use this information in a number of ways to learn more about the people you are recruiting, as well as help identify likely candidates for further internal development and promotion.
In fact, a study of Cigna’s tuition reimbursement program found that their participating employees had, on average, a 43% incremental wage increase over a three-year period. The employees seeking tuition reimbursement received more promotions and continued on with the company longer with those who did not.
Tax Benefits for Both Parties
Reminding employees of the tax benefits of programs is already a regular occurrence for benefits administrators — you do it with so many healthcare and retirement programs as it is. Employees get another shot at tax benefits with tuition reimbursement, as federal law allows for up to $5250 in tax-free tuition reimbursement when it’s part of an employer program. Additionally, employers can also take that $5250 per year as a tax deduction, making it a savings for both parties.
Administering Tuition Reimbursement
Offering tuition programs as part of your benefits package doesn’t have to be another black hole of paperwork. With HR concierge services from Web Benefits Design, your communication and admin is handled. Learn more about Web Benefits Design and get started streamlining your benefits today!