On paper, tuition assistance programs – such as tuition reimbursement – appear to deliver a win-win situation. Adult employee learners can easily pursue their education while continuing to work full- or part-time. At the same time, organizations can provide a meaningful benefit to their people, enabling them to continue learning and growing their skills, deepening their loyalty to the company and reducing their likelihood of attrition.
However, what looks like a logical business decision in theory often doesn’t result in value for these learners or their employers.
U.S. companies spend nearly $180 billion every year on formal training and talent development, investing $28 billion in tuition assistance. Yet employee participation remains at a mere 1-2% for these types of programs. Furthermore, reimbursement programs rarely have proven outcomes and are difficult for workers to use, especially since employees shoulder tuition costs upfront and then go through complicated processes to obtain reimbursement months later.
As a learning and development (L&D) practice, tuition reimbursement is outdated, underutilized and unproductive. In this post, we dive into five common pitfalls of traditional tuition assistance programs and outline effective measures you can take to steer clear of these pitfalls.
4 common pitfalls of traditional tuition assistance programs
1. Difficult to measure and show ROI
Many corporate HR and learning departments don’t have mechanisms in place to assess the effectiveness of their tuition assistance programs. That means executives typically have no visibility into outcomes, including learner progress, completion rates or employee retention.
“Companies can typically spend $50 million or more on tuition assistance or reimbursement, but if you ask them how many people graduated, what schools they went to or if their people have actually progressed, they have no idea,” says Jonathan Lau, Co-Founder and Chief Operating Officer at InStride. “They are administering the program with no measurable return on that investment.”
There are several crucial factors to keep in mind to prevent this from happening.
First, find a strategic alignment between the program’s objectives and greater business goals. This means understanding your company’s top talent priorities (such as upskilling, retention, engagement, advancing diversity, etc.) and then designing an education program around those needs.
SSM Health’s FlexPath Funded program is a great illustration of this strategic alignment. FlexPath Funded aligns with SSM Health’s commitment to developing a diverse team of lifelong learners. The program is designed to create equal access to education opportunities that increase representation at all levels and provide mobility pathways.
The next thing to do to address outcomes and ROI is to know the right metrics to track, such as talent mobility, turnover and distribution, plus cost to hire, time to hire, onboarding costs and more.
Finally, the third key component is leveraging a technology platform that makes it simple for HR administrators to manage and measure the program’s performance through robust reporting capabilities.
With these key elements in place, you can track your program’s performance and demonstrate to the C-suite and other stakeholders how a workforce education initiative drives measurable business value.
Many tuition assistance initiatives are not built with accessibility in mind. For example, the tuition reimbursement model requires employees to pay upfront for tuition, and then wait weeks or even months for reimbursement. This can be a major financial burden that deters employees from participating.
Plus, there are typically many administrative burdens for both employees and employers. In one InStride survey, employee respondents cited filling out applications, completing financial aid forms and locating transcripts as the most difficult barriers to accessing tuition assistance programs.
The consequence of this inaccessibility? Only about 25% of interested employees ever start an application to take advantage of this benefit and 2% of those individuals enroll.
Workers leave the chance for a better future and income on the table simply because their employers have made it too difficult, too frustrating or too confusing for them to access it.
Let’s consider how you might develop a more accessible program that eliminates common barriers to participation.
For instance, implementing a program that follows a direct-bill model has employers pay tuition expenses upfront, rather than reimbursing employees later. This ensures that the financial burden is taken off the employees, making education more accessible to them.
Additionally, a user-friendly technology platform with a robust resource center can make all the difference when it comes to helping employees navigate the application and enrollment process.
The desire for employee education exists, but so does a lack of awareness about how to find and pay for it. In the same survey cited earlier, 80% of employee respondents said they were interested in going to school while working, but only 40% knew their employer offered a tuition reimbursement program.
Companies implement these costly programs but do little to promote them effectively and encourage participation.
Additionally, it’s common to see education programs get buried in a sea of other benefits, making it difficult for employees to find the information they need, enroll in the programs or seek guidance.
Before employees can take advantage of development opportunities, they have to know about them. This requires building and executing a communications strategy to drive awareness among your employees on an ongoing basis.
An effective communications strategy will leverage multiple marketing channels to drive participation among your employees, including email, webinars, social media, posters and more.
4. Lack of support for learners
Many employees are interested in going to school while working but don’t know where to start. Tuition reimbursement programs offer a wealth of courses and programs but do not include support capabilities in their offerings. Without dedicated support, employees might struggle to navigate through and select the appropriate courses or programs, or they may not be aware of opportunities to apply for previous academic credit.
Access to learner support is critical to boosting employee participation. In addition to providing employees with the resources to navigate and choose the right courses and programs that are relevant to their career goals, it also helps build confidence by empowering them to visualize tangible career outcomes for themselves.
With the right support capabilities, embarking on an educational journey can feel achievable instead of overwhelming.
A better approach to workforce education
By design, traditional tuition assistance programs keep employees and employers from reaping the benefits of education. It’s time for business leaders to rethink tuition assistance and leverage a more modern solution that drives talent outcomes.
At InStride, we’re championing a new, modern approach to workforce education — one that prioritizes accessibility and eliminates barriers to learning. Through our solutions, we have helped 40+ businesses give thousands of employees access to education opportunities from high-quality academic institutions, helping them avoid $60+ million in student debt while driving business impact.
Let our experts do the heavy lifting for you: Learn how you can transform your tuition assistance program for greater impact by connecting with us today.