While paying for employees' college costs can be expensive, tuition-reimbursement programs can be an effective way to recruit and retain good workers. It can help foster employee job satisfaction, improve productivity and contribute to the overall success of your business.
In a study conducted by Spherion, a staffing and employment-services firm, 62 percent of the respondents who had received training or mentoring said they were very likely to stay with their current employer. And 61 percent of employees who were mentored said they were likely to remain in their jobs for the next five years.
Like any other type of compensation or benefit, setting up a tuition-reimbursement program requires some foresight and planning. Before you establish a tuition-reimbursement program, consider the following:
What you'll reimburse. Decide what type of classes — vocational, technical or academic — your program will cover, and if your reimbursement will cover books and other related fees.
How much you'll reimburse. Since the IRS lets companies contribute up to $5,250 tax free, some businesses cap their reimbursement fee at this amount. Some companies pay 100 percent, 75 percent or 50 percent of tuition costs, while others compensate according to grades; for example, an "A" is reimbursed at 100 percent, a "B" at 80 percent and a "C" at 50 percent.
Which employees are eligible. Determine whether or not you'll reimburse both full-time and part-time employees, and establish terms for tuition-reimbursement eligibility. For instance, an employee must work at your company for six months before they can take advantage of the program.
Which classes you’ll reimburse. Clearly spell out the types of courses you'll pay for. Most employers only pay for classes that enhance an employee's job-related skill set. If you have doubts about the credibility of a program, ask the employee to bring in a course description.
How you can support the employee's learning efforts. Once an employee has started taking classes, decide how you can help them juggle their work and school responsibilities. Consider letting employees telecommute or work flexible hours during exams and deadlines.
Want more expert advice about hiring and keeping good employees? Have you wondered how to use the Web to your advantage in recruiting? Our guide to online recruiting includes some general guidance on interviewing and hiring, and it also tells you about the different online resources available to support your hiring and recruiting. Learn more about how to get the best people for your business with The Scoop on Online Recruiting.