Offering tuition reimbursement as a benefit provides your employees with the training and education they need to succeed within your company. It can also be an excellent way to ensure that you attract the right people and retain them over time. It’s cost-effective and adds value to your company image.
Below we break down five reasons why tuition reimbursement as a benefit is a valuable tool for your company.
1. Tax breaks
Tuition reimbursement programs offer tax breaks to employers resulting in a low-cost, high-value benefit. Money employers spend on repaying tuition or other education expenses is tax-deductible, up to $5,250 per employee per year. In addition, employees that take programs specifically designed to teach them skills they need in a new job within the organization can qualify for more tax breaks.
2. Improved retention
92% of companies offer tuition reimbursement as an employee benefit, but only 25% of employees ever start an application. Eighty-two percent of employees who take advantage of these benefits said the skills they learned helped them be more effective as employees. The same study also showed that 84% said they were more prepared for the future of work. Seventy percent of US employees would stay with their current employer if career development opportunities were available to them. Why? Because when organizations help future-proof employees’ careers by teaching them skills that won’t become obsolete, employees see a direct path to career advancement, which improves retention and boosts morale.
3. Reduced recruitment costs
On average, SHRM reported that the average cost of replacing an employee is six to nine months of an employee’s salary. Replacing an employee who makes $70,000 annually year could cost over $50,000 in recruiting and training costs. Incorporating tuition assistance is more cost-effective than having high turnover and replacing employees who leave. It helps companies save money on recruiting efforts while improving retention rates among existing employees.
4. You attract top talent
Paying employees to pursue educational opportunities has the potential to help you attract new talent. Offering tuition assistance shows high-value candidates that your company is invested in their professional and educational growth. It can even be the deciding factor between your offer and a competing employer’s job offer.
5. Employer brand
Covering the costs of employees’ education is a great way to show that your company provides value and is dedicated to helping its workforce grow and learn on the job. Even if employees are working in minimum-wage frontline positions, education assistance can help them obtain tools to advance in the industry and their careers.
Read real student stories from employers that offered tuition assistance:
Program Manager | Raytheon Technologies
Realty Team Lead | Walmart
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