Are tuition-assistance programs being used to best advantage?

October 7, 2012

Employer-based tuition-assistance programs are often touted by experts and human resources professionals for the reciprocal benefits they can provide for workers and their workplace.

For employees, the subsidy can offset the cost of obtaining a degree that will allow them to broaden their skills and advance their careers. And for companies, the money serves as a way to retain and reward top talent.

A recent survey of companies in the Washington area reflects this mutually favorable perception: 74 percent of firms reported that they have such programs in place, and 25 percent said they had recently increased their budgets for pay for the benefit, according to data collected by the Community Foundation for the National Capital Region, the Greater Washington Board of Trade, and four local community colleges.

But the study also found that 36 percent of the companies surveyed are not using all of the money they have budgeted for these programs. This dynamic suggests that, even as some employers say they are struggling to recruit and hang onto highly-skilled workers, they may not consistently be using tuition-assistance programs to their maximum advantage.

“I think the overarching theme of this study is that for companies that want to grow from within, tuition-assistance programs are a remarkably valuable tool, they just need to be better utilized within the company,” said James C. Dinegar, president of the Greater Washington Board of Trade.

A variety of factors could be impeding these programs from reaching as many workers as possible.

Dinegar said that some employers could probably do a better job of making it known to employees that this option is available.

Even then, though, some workers still aren’t stepping up to take advantage.

Peter Cappelli, a professor at the University of Pennsylvania’s Wharton School who has studied employer-based tuition-assistance programs, said that as workdays stretch longer for many employees, people simply don’t feel they have time to take classes on top of an already-demanding workload.

And even though employers are offsetting the cost of education with tuition assistance, the onus is still on employees to pay for part, if not most, of their studies. In the wake of a recession, Dinegar said some workers may not be signing on for tuition-assistance programs because it’s still too hard to come up with their own share of the cost.

Some companies have had success by linking the assistance to their business mission.

At Evans, a small consulting firm based in Falls Church, a program was put in place last year that grants full-time employees $5,250 a year to spend on an approved degree-granting program.

Chief executive Sue Evans said that a quarter of her employees have taken advantage of it so far, and that most of the budget she allotted for this purpose was used up. So far, she has been satisfied with the results.

“I think that it was a great decision,” Evans said. “And it’s given us a lot of tangible rewards in terms of what the [employees] bring back to the company.”

At firms where these programs have not been as widely used, Cappelli said it might be helpful for employers to change their approach to implementation.

“Most companies right now treat them as a benefit. They don’t calculate what gain they get out of them,” he said. “There aren’t that many that think of them strategically.”

Sarah Halzack is The Washington Post's national retail reporter. She has previously covered the local job market and the business of talent and hiring. She has also served as a Web producer for business and economics news.
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