Tuition reimbursement is an educational benefit that many employees covet and praise. Such programs encourage workers to maintain a learning type mentality, help in developing candidates who are worthy of promotion in the future and help companies retain their best talent. However, before a company decides to offer tuition reimbursement, they should consider if it will actually help or hinder their business. And if your company is not giving you reimbursement for your tuition fees then another great way to earn some money is that you look for tuition jobs that you can handle with your job so that you can pay for your college and other expenses effectively.
According to the National Center of Educational Statistics, the average employer contributes around $3,000 toward tuition. Tax law states that $5,250 can be contributed tax-free up to 2010 for the benefit of employees. Thus tuition reimbursement reduces your business’s tax liability while increasing the ability to retain and promote employees. A company should consider the following aspects of a tuition reimbursement program:
The Learning Mentality: It is a good idea to encourage scholarship in your business. People who are engaged in school are likely to learn new skills, develop new ideas and be more focused on their job. Encouraging education is like encouraging innovation. However, a problem might result if you need more routine work then you need innovative thinking (i.e. assembly worker). For example, if your company only requires simple routine tasks, tuition reimbursement for these jobs may not have the same benefit as it does for professional employees.
Promotional Opportunities: If your company desires to promote from within or you are in an industry where skills have to be homegrown, then it makes sense to offer tuition reimbursement. By encouraging people to become educated you have some basis of promoting people with experience to the next level; thereby retaining these people. However, if the average person works only one or two year’s in your company, tuition reimbursement might be setting up the next employer to receive the benefits.
Retention of Good Employees: Let us face the fact that good employees are people who want to progress in life and are looking for companies that help them do that. Thus, the companies that offer the best benefits are likely to retain the best employees. If these life-long learners are going to be content with an employer they will want tuition reimbursement. The negative side of this retention is that you may have a few employees who are staying with your company only because you are paying for their school. Once they complete their education they will be gone.
Deciding if your company should offer tuition reimbursement will be based on a number of factors. These factors include whether you have long-term retention of employees, what your financial state is, what type of job your employees are doing if you want to promote from within, if you need to reduce your tax liability, and the type of industry you work in. Tuition reimbursement costs money and employers should not haphazardly offer these programs without weighing both their strengths and weaknesses.