Of the myriad ways employers can make an impact – on their bottom lines and on society – providing financial support for workers to earn an education beyond high school ranks near the top. Tuition reimbursement programs used to be viewed as a nice-to-do, but they’re increasingly seen by corporate leaders as a means to gain a competitive advantage.
Nearly 60 percent of organizations today help cover the cost of their employees’ higher education, including Fortune 500 companies such as Cigna Corporation, Starbucks and United Technologies. In coming years, that percentage should grow to include nearly all companies as the compelling case for talent investment becomes even clearer to executives.
A confluence of factors, from the intensifying competition for talented workers to the more specific skills and knowledge demanded for today’s jobs, make now an important time for employers to prioritize helping employees and prospective hires earn a degree or credential. Three reasons, in particular, illuminate why such an investment will be critical to success over the next decade – both for companies and for society.
Talent investments bolster employers’ bottom line. Even though nearly six in 10 companies invest in employees’ higher education, just two to five percent of those organizations track the return of their investments. Among those that do, however, there is powerful evidence of the positive bottom-line impact. Health service provider Cigna Corporation, for example, generates a return of 129 percent through its Education Reimbursement Program, through which the company provides tuition assistance to employees. A study released earlier this year by Lumina Foundation showed for every dollar Cigna invests in the program, it earns the invested dollar back and generates an additional $1.29 in talent-management savings. Another study supported by Lumina Foundation showed the tuition benefits program offered by a large communications technology company generated similarly positive results, including a return on investment of 39 percent and net savings of $54 million from 2012 to 2014.
Educating workers fuels employers’ need for talent. There’s growing demand and competition among employers for talented workers. This will only intensify as the workforce’s generational makeup changes from predominantly Baby Boomers to Millennials, who will constitute three-fourths of workers by 2025. Tuition assistance can be a powerful incentive for attracting and retaining these workers, who, data show, favor job opportunities that offer educational growth, training and similar benefits. Investing in employees’ tuition has been shown to increase employees’ commitment to a company. For example, in the study of Cigna’s Education Reimbursement Program, participants experienced 8 percent higher retention, 10 percent more promotions, and 7.5 percent more transfers within Cigna than non-participants. What’s more, companies face a significant need for workers with specialized skills and knowledge to execute jobs they’re seeking to fill. By providing education assistance, employers can cultivate their own pipeline of workers who are ready to thrive.
Investing in talent is the right thing for employers to do. Supporting workers on the path to postsecondary education offers a powerful way to drive social good. There’s now greater demand than ever for workers with education beyond high school, with nearly two-thirds of U.S. jobs projected to require postsecondary education by 2020, yet today only 45 percent of Americans hold a high-quality degree or credential. For our country’s economic success and the well-being of millions of Americans, we must grow higher education attainment to help close this gap. Employers can play a key role by helping workers complete their postsecondary education. Such support is especially powerful for the millions of adult learners who have started college, or cobbled together college-level learning through work or other experience, but were deterred from earning a degree because other commitments or the expense of higher education got in the way. While companies may not be able to provide lifelong employment, it’s clear that they can help employees become better workers, more skilled and more competitive in the workforce.
We have an opportunity to build from the powerful momentum underway for talent investment and make it so that every employer sees it as a priority to invest, and every worker has the opportunity to gain the credential needed for career success. In the next decade, employers could make tuition assistance part of standard business practice. There’s never been a more compelling time – or more powerful reasons –for them to do so.
Via LinkedIn
Authored by Jamie Merisotis and Karen Kocher.
Merisotis is President and CEO of Lumina Foundation, a national foundation dedicated to increasing Americans’ college attainment. Kocher is Chief Learning Officer at Cigna Corporation, a global health service provider.
