Today’s companies are more competitive than ever, and there’s an ongoing battle for acquiring and maintaining top talent. That’s why many employers choose to go the extra mile and offer perks to their employees — one of which is an educational assistance program.
What is an Educational Assistance Program?
As defined on Inc.com, an educational assistance program is “A type of employee benefit in which an employer reimburses employees for the costs associated with continuing education. Assistance usually comes in the form of reimbursements for tuition, fees and books.” Simply put, an employer provides financial assistance to employees who wish to pursue an ongoing education. The exact amount of money provided can vary, and it’s often contingent upon employees maintaining a certain grade level.
Why Implement this Type of Program?
Employers choose to provide their employees with educational assistance for many reasons. One of the more common reasons is to increase loyalty so that workers stick around longer and develop a sense of loyalty to their employer. Another reason is to ensure that employees are equipped with the necessary skills to perform their jobs at a high-level. This is particularly important in industries where there’s a lot of change (e.g. tech and engineering), helping to maintain a knowledgeable and adept workforce.
An educational assistance program can also serve as an effective recruiting tool. Millennials in particular can kill two birds with one stone by having a decent job and completing their education without racking up massive debt. It can also be beneficial from a public relations standpoint by enhancing a company’s overall reputation.
Information from a survey by the International Foundation of Employee Benefit Plans (IFEBP) found that “Almost 75 percent of organizations say their educational assistance offerings are successful.” More specifically:
- 45 percent of programs were successful in retaining current employees
- 44.3 percent kept employees current on evolving skill sets required for the organization
- 39.4 percent maintained/increased employee satisfaction and loyalty
- 15.6 percent attracted future talent
- 12.8 percent maintained/increased productivity and innovation
The data shows an encouraging outcome for companies using educational assistance programs . With nearly three-fourths of companies reporting success, it’s likely to have a positive effect on your company.
Perhaps the biggest drawback is that some employees may use the program to “Get an education and run.” Someone who receives a degree after a few years and takes off for a better, higher paying job will leave the company without the fruits of its investments.
Many organizations report only a small number (five percent) of employees participating in the educational assistance program offered. For this reason, it could potentially be a waste of time to set one up and complete the associated administrative tasks.
When considering implementing an educational assistance program, it’s necessary to look at the current state of your business and determine if it would make sense. However, it’s important to note that by and large, the positives outweigh the negatives. Offering this perk to employees can be a smart move in the 21st century.