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When deciding where to work or even where to apply for a job, salary and health insurance packages are usually priority number one. While these factors are and should be crucial, it is often worthwhile to consider tuition reimbursement programs, as well. Though the benefits from education are not as instant or immediate as those from a paycheck, they do exist and are important enough to be included in the decision process.
What is Tuition Reimbursement?
Tuition reimbursement or educational assistance is the financial support that various companies and employers offer to employees pursuing educational degrees. The types of degrees may vary to include high school, trade or technical, community college or higher education. Classes can take place at brick and mortar locations or completed online. Sometimes employees have more flexibility when selecting which type of degree or class to pursue. Other times, the choice is limited to only those degrees relevant to the function of job.
The benefits to individuals from continuing education are fairly straightforward. Additional education usually promises access to more jobs, promotion eligibility and higher salaries. In a study conducted by the Lumina Foundation at Cigna (a major health insurance company), employees who participated in continuing education earned about 43% more over time than those who did not.
Generally, further education results in added knowledge and intellectual stimulation, both of which can make employees happier and more productive. Participating employees can also enjoy some degree of job security since employers don’t want to lose those in whom they’ve made an investment. Finally, spouses and partners are sometimes eligible for tuition reimbursements – even more reason to get on board.
Employers benefit from tuition reimbursement programs in several ways. The return on investment is high. Why? First, programs like these reduce turnover which in turn minimizes recruiting and training costs. Since the continuing education is tied to the job, employees are less likely to leave the company. The investment also creates a sense of allegiance between employee and employer. Employees who feel supported have more loyalty and therefore stay longer and work harder toward collective success. This sequence of events allows employers to promote from within, costing much less than external hires. Employers can also contractually obligate participants to stay with the company for a specified duration even after the degree is complete.
Education packages also help attract better talent. Between comparable jobs, qualified applicants will opt for the job that offers the opportunity for growth. Likewise, employees with more education and knowledge have stronger performance and productivity, ultimately generating more profit. Finally, most companies offering tuition reimbursement receive tax benefits, which again contribute to the bottom line.
Next week, read about what you should be wary of when comparing tuition reimbursement programs in Part II of this post.
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