Want Engaged Employees? Offer Tuition Assistance

Want Engaged Employees? Offer Tuition Assistance

With labor markets around the world tightening, companies all over the globe are reevaluating their employee engagement efforts to make sure that they retain their valued and difficult-to-replace employees. Available statistics paint a compelling picture of why they’re right to do so.

Globally, companies with the highest employee engagement indicators retain the highest percentages of their existing employees and post higher shareholder returns than their peers. Successful engagement efforts can reduce the likelihood of an average employee’s departure by up to 87%, which goes a long way toward eliminating costly turnover, and contributes to the positive growth strategy. The fact is that there’s no debating the merits of a robust employee engagement program for businesses.

The only remaining debate is what the most efficient and effective means of promoting employee engagement consists of, and the answer, at least in the U.S., is a simple one: education.

Employee Education Is Key

In study after study, American workers keep citing educational opportunity as a primary reason that they remain in their positions or choose to seek other employment. Surveys have indicated that 87% of Millennials consider development opportunities an important factor when choosing a position. As the largest part of the U.S. workforce, it’s an opinion that employers can’t afford to ignore.

Despite the data, a surprising number of businesses aren’t exploiting this valuable avenue of employee engagement. Many believe that the costs could be prohibitive and that the benefits aren’t big enough to justify those costs. The fact, though, is that there are plenty of ways to keep the costs of an employee tuition assistance program low enough to reap worthwhile rewards. It’s also worth noting that the rewards of tuition assistance programs can’t all be measured strictly in dollars and cents.

Containing Costs

It is possible for employers to create a tuition assistance program that satisfies their employees’ desire to better themselves without breaking the bank. One common way that employers approach cost containment is to make it a requirement that employees file for federal financial aid before their employer-sponsored education benefits begin. By structuring a tuition assistance program in this way, a business can offload some of the costs of the program onto the federal government while still encouraging employees to participate. It’s a win-win for both sides of the equation.

Tangible and Intangible Benefits

Increasing employee engagement through a tuition assistance program pays off both directly and indirectly. A case study of the program offered by global insurance giant Cigna offers an excellent illustration of that point. Their program performed exceptionally well from a financial standpoint, not only paying for itself in saved talent management costs but saving an additional $1.29 per dollar spent on the effort. Participating employees also experienced 43% more incremental wage gains than their non-participating peers, making it an enormous success with employees, as well.

In addition to the direct financial benefits derived from a tuition assistance program, businesses that offer them also benefit from an increase in the skills of their labor pool. For example, companies that offer a tuition assistance program that extends up to graduate studies can build a team of highly-skilled employees within their ranks. Interested employees can pursue an MBA online, or a master’s in marketing or another related field which will enhance their ability to perform their current job functions. These up-skilled workers may also be promoted into higher-level positions, which saves the employer thousands of dollars on external recruitment efforts and other onboarding costs.

An Employee Engagement No-Brainer

Taken together, the benefits of an employee tuition assistance program far outweigh the associated costs. Since they’re a benefit that employees consistently ask for, there’s no reason for companies who are trying to increase employee engagement not to oblige them. In a challenging labor market, the potential for increased employee retention alone makes the creation of an employee tuition assistance program one of the easiest decisions a business manager will ever have to make. It’s also one of the rare examples of alignment in the interests of employees and their employers resulting in a net gain for both, and what more could any business ask for?