Many employees want to learn more and grow in their careers. Many organizations encourage professional advancement.

When growth includes earning a degree or certification, attending webinars or seminars, or taking online or in-person classes, should the organization pay for some or all of that education? If so, does the employee owe the organization anything in return?

There is no single best answer. Here are some things to consider and what the data says about the benefits of paying for employees’ education.

How the Landscape Is Changing

Employees want to build more professional skills via education. And they should. A study by Dell Technologies predicted that 85% of the jobs that will exist in 2030 haven’t been invented yet.

Most organizations know that success often requires a culture of lifetime learning, and financially supporting employees who want to grow and learn is a big part of that.

That support shouldn’t be limited to skills and knowledge that employees can apply today. While no one can predict what skills will be needed a decade from now, employees tend to be more loyal to organizations that invest in their professional growth.

Post-pandemic, employees also have a stronger focus on work-life balance, flexibility, and wellness. They appreciate an employer who understands the importance of both career and personal development that connects educational opportunities with career and life goals.

Benefits to Organizations

Providing educational benefits to employees is more than a feel-good exercise. Those benefits can boost recruiting and retention significantly:

  • 84% of employees cited tuition reimbursement as an important factor in their decision to join a company, according to a survey by EdAssist.
    More than 27% of employees quit their jobs each year, and quitters cited lack of career development as the number-one reason in Work Institute’s 2019 Retention Report.
  • Employees are much more likely to be engaged and have a passion for their job if reimbursement programs support their personal and professional growth.
  • People feel more valued when their employer encourages and supports their desire to develop the skills that most interest them.
  • Employees can receive $5,250 tax-free from an employer annually, a significant tax benefit that boosts loyalty and morale.

Ensuring Accountability

For many organizations, two of the key issues are how to offer educational reimbursement and how to ensure accountability.

On the payment side, employees should be encouraged to use educational benefits. Depending upon salaries, asking an employee to pay $200 and be reimbursed for a seminar may be fine, but asking them to front $5,000 for a high-level certification may create a hardship. It’s not enough to say, “We support your professional growth”; it has to be feasible.

Employees need the ability to go to school, which might involve paying for courses upfront. Sometimes employers develop relationships with specific institutions and arrange for employees to pay at the end of the course, after the employee submits the paperwork and passing grade.

Working with financial institutions to arrange for deferred payment is important because education is often expensive. Such help is especially important for those workers who can most benefit from it and who really need education assistance. Sometimes the ability to pay is the biggest obstacle to pursuing an education.

Organizations should certainly make reimbursement contingent on passing the course or achieving the certification. Think carefully about this, though. Some organizations will pay 100% reimbursement if the employee earns an A in the class, 80% if they earn a B, etc. Is the grade that important, or is building new skills more important?

One final consideration: Such benefits should definitely include a payback period, where employees must reimburse a prorated portion if they leave within a year or two of completing the course.

The Lindenberger Group is a human resources consulting firm that can help organizations in all industries design and manage educational programs that boost recruitment, loyalty, and morale, while helping prepare employees for future challenges and opportunities. For more information on our human resources consulting firm or to discuss your HR needs, please contact us at 609-730-1049 or send us an email.