Despite today’s competitive job market, employees often have little hesitation about searching for a new job if they become unhappy at work. The average employee tenure today is 4.2 years, and according to a recent study by SurveyMonkey, 51% of employees would leave their job today if offered another opportunity.
With a low unemployment rate, the competition to attract and retain talent is intense. As such, companies have turned to offering additional paid time off, sign-on bonuses, flexible hours and a range of other perks in an effort to fill jobs and keep employees productive.
Among the benefits an employer can offer, those related to education have been found to be particularly popular with employees but also advantageous for the employer as they can result in both a more skilled and dedicated workforce.
Tuition Assistance and Reimbursement
With this benefit, employers pay for a predetermined amount of continuing education credits or college coursework to be applied toward a degree or trade school. These programs are intended for employees looking to advance their education as it relates to their current career track, offering the chance to increase their industry knowledge and develop advanced skills.
Conditions for reimbursement sometimes apply and should be reflected in an employer’s policy. Many employers require that the courses or degree sought be applicable within their company. Another common condition relates to the level of cost that the company will take on. Most employers have an annual cap on what they’ll cover. The IRS allows $5,250 per year to be written off for an employee’s education costs, so anything above that will imply additional tax expenses for the employer. Lastly, many companies adopt a “grade policy,” — reimbursing 100% of only courses where an employee earns a grade of “C” or better.
The Society of Human Resource Management’s 2018 Employee Benefits Survey report found 51% of organizations now offer undergraduate educational assistance and 49% offer graduate educational assistance. Organizations that are diverse, inclusive, and offer financial wellness and development opportunities have higher employee retention rates and lower turnover rates. This results in a better bottom line for everyone.
Student Loan Assistance or Forgiveness:
With this benefit, employers pay back an employee’s student loans at a predetermined amount per month. This option has recently grown significantly in popularity as many employees come into a job having already reached their desired education level, and at a greater cost than ever.
The Federal Reserve reports that more than 44 million people in the U.S. collectively owe $1.5 trillion in student loans. About 65% of that debt belongs to people under 40. Seven out of 10 new college graduates owe an average of $37,172.
Student debt, however, is not just for the young. 6.8 million student loan borrowers between 40 and 49 owe $33,765 each, on average, and the debt is likely to grow. The Congressional Budget Office estimates that $1.27 trillion in new federal student loans will be added between 2018 and 2028.
Internal Training and Development
Outside of higher education supportive programs, many employers prefer structured on-the-job education, or internal training and development. These types of programs allow a company to strengthen specific skills in order to increase efficiency. Employers can provide internal continuing education courses with existing teams; or work with outside consultants to customize programs for staff.
Compared to the average employer investment of $1,800 per employee for an in-house training program, the average costs of employee turnover for someone earning $10 hourly is $4,291. For many companies that’s an easy decision.
Amy B. Bakay, SHRM-SCP, is the owner and principal consultant for HR NOLA, a human resources outsourcing and consulting firm headquartered in New Orleans. She is the current president of the board of directors for the NOLA Society of Human Resources Management. She may be reached at amybakay@hrnola.com.
