Tuition Reimbursement: Changes on the Way?

Transcription

1 Tuition Reimbursement: Changes on the Way? A Corporate University Xchange Research Report October Corporate University Xchange

2 Contents Introduction...3 The Study...3 The Study Results...6 Plan Design... 6 Program Management... 6 Marketing and Integration... 8 Measuring Impact... 9 Participant Eligibility What can participants study? Where can they study? Acceptability of online learning Program Reimbursement Other Expenses Payment Terms and Timing Global Considerations The Participant s Obligation Plan Utilization Participation Actual Spend Plan Changes Made Changes Planned Conclusions...28 Keeping track Using the dollars well References Corporate University Xchange

3 Tuition Reimbursement: Changes on the Way? Introduction Tuition Reimbursement or Educational Assistance programs are attracting lots of attention from Learning and Development (L&D) groups trying to find ways to optimize the money spent on learning. They know that, properly managed, relationships with colleges and universities can expand the reach of corporate learning organizations, and that, as currently managed, most tuition reimbursement programs do not consider strategic business needs when spending is approved. In fact, as this study shows, most companies are not holding employees responsible for more than passing courses, and managers are never asked whether that money spent has resulted in any kind of a performance improvement. But that seems to be changing somewhat. Some companies are matching college experiences with individual development plans, and many more are planning to introduce that connection in the coming year. Plans are in place to improve integration with formal L&D programs and illustrate how tuition reimbursement can align with career goals, though many companies still have no thought of doing either. One impetus for better measurement and having tuition reimbursement programs match corporate performance needs is the large amount of money that is currently being spent on these programs. The 2003 Eduventures study reported a total spend on tuition reimbursement of $10 billion a year (1), and the American Society for Training and Development (ASTD) reports that tuition reimbursement continues to account for about 12 percent of all money spent on corporate training (2). Both the Eduventures study and the more recent 2004 study from the Council for Adult and Experiential Learning (CAEL) (3) both indicate that most companies are not measuring the results of their programs. This study describes the current state of tuition reimbursement program practices, using both the statistical survey results and the conversations with practitioners and others that were willing to share their thoughts. It will first describe the study, and then proceed to the results and discussion. The Study The study was initiated following an almost unprecedented wave of questions that came into the Corporate University Xchange inquiry process, all asking about various aspects of creating and making the most of tuition reimbursement programs. Even companies that philosophically were willing to fund almost any degree program were asking how to assure that the programs being paid for were sound and worthwhile. The quantitative research for the study was conducted in a three week period in June 2007, with 180 companies responding. They ranged in size from 100 employees to over 100,000. Clearly, even small companies consider this program worth the investment Corporate University Xchange 3

4 Employee count 50,000 11% 20,000-49,999 11% 5,000-19,999 25% 0-4,999 53% The industry with the highest percentage of participation was healthcare, with manufacturing, finance and educational services representing 10 percent each. The survey actually broke down the industries into more groups, but this representation of the data was more amenable to analysis. 14% Industries Represented 12% 8% Construction, Transportation, Mining Energy, Utilities, Telecommunication Arts, Entertainment, Retail and Real Estate Manufacturing - Heavy Manufacturing - High Tech Manufacturing - Other 6% 4% Professional, Scientific, and Technical Services Educational Services Finance Government 2% Healthcare and Social Assistance Insurance 2007 Corporate University Xchange 4

5 The survey consisted of 4 major divisions. Plan Design Plan Utilization Plan Changes Demographics Most of the questions dealt with the actual design of the plans, as that seemed to be the area of most interest to the Corporate University Xchange audience. Survey participants were asked if they were willing to participate in follow-up interviews, and discussions were held with eight companies. Discussions also took place with college and university providers and service providers involved with tuition reimbursement. Their comments, ideas and suggestions are included in the discussion of the study results Corporate University Xchange 5

6 The Study Results Plan Design Program Management Overall, HR manages most tuition reimbursement programs. This is not surprising, given that most tuition reimbursement programs are considered an employee benefit, and justified as a way to recruit employees and influence retention. Tuition reimbursement program management 5 45% 4 35% 3 25% 2 15% HR Learning and Development HR and Learning and Development Share Ownership of the Program Organizational Development Other 5% There are differences, however when the size of companies is considered, with respondents in medium-sized and the largest companies having L&D involved more often. The largest companies in the survey group use joint ownership to manage the programs more often than any other group. Management of Tuition Reimbursement Programs (Employee Count) Overall 0-5,000 Employees 5,000-20,000 Employees 20,000-50,000 Employees >50,000 Employees HR 46% 51% 32% 69% 15% L&D 26% 25% 39% 6% 38% HR and L&D Jointly 16% 14% 16% 19% 31% Organizational Development 4% 6% 5% Other 6% 4% 8% 6% 15% 2007 Corporate University Xchange 6

7 There are also differences in the way tuition reimbursement is managed when industries are considered. The manufacturing industry has a much larger percentage of companies with L&D managing learning than do the others, and organizational development has a hand in the construction and finance industries. Management of Tuition Reimbursement Programs (Function Managing) Overall Construction Finance Professional Services Manufacturing Healthcare HR 46% 63% 47% 5 15% 6 L&D 26% 18% 21% 38% 3 HR and L&D Jointly 16% 25% 18% 21% 31% 5% Organizational Development 4% 13% 18% Other 6% 7% 15% 5% Most companies have just a few internal staff devoted to program administration. Only six percent of companies surveyed use external providers like Center for Adult and Experiential Learning (CAEL), Edcor or Educational Advisory Services (4-6). This reflects the smaller employee count of the companies surveyed. In fact, companies over 50,000 employees used external suppliers 42 percent of the time. 9 Staff devoted to the administration of the tuition reimbursement program Internal Staff 3-5 Internal Staff More than 5 Internal Staff An External Provider Corporate University Xchange 7

8 Marketing and Integration Companies are generally marketing the program to employees and job prospects, though there is lots of room for improvement, with 51 percent of companies feeling they need to improve marketing to employees, and 42 percent needing to improve marketing to prospects. The respondents were consistent in this response; later on, when companies were asked why they thought participation was lower than they wanted, 49 percent mentioned marketing as the reason. Most companies either already align tuition reimbursement programs with career paths, or plan to, and they also demonstrate participation to senior managers. The integration of tuition reimbursement programs with formal L&D programs is not even on the agenda for 38 percent of respondents. 6 Current state of marketing and integration 5 4 Market the program to employees 3 2 Market the program to job prospects Integrate tuition reimbursement activities with formal L&D programs Illustrate how tuition reimbursement programs can align with career paths Provide regular reports to senior managers to demonstrate participation in the programs Do this well now Do this now but needs improvement Not doing this now but plan to No plans to do this Not applicable One of the companies we interviewed was really doing most of these things well. The goal of their program was to develop an internal talent pipeline so that people could move from jobs in their large manufacturing operation to other places within the company. There are articles and success stories about the TAP program in the company newsletter, graduates are monitored to see if they are being promoted and retained, and senior managers get regular reports about exactly who s using the program, and what courses of study are they pursuing. Participants are also polled about their satisfaction with the program, something not seen with most of the companies surveyed (see below) Corporate University Xchange 8

9 Measuring Impact Most companies justify the dollars spent for tuition reimbursement as part of an employee value proposition that attracts and retains employees, and the programs are marketed that way. In most recent CAEL study (3), these were the reasons given for having tuition reimbursement programs. Reason for providing educational benefit % of Employers Employee retention aid 7 Improve productivity 69% Increase qualifications to do new work 61% Develop promotable employees 57% Recruitment competitive edge 48% Improve employee morale 5 To be an employer of choice 38% Tradition and culture of the company 42% Enhance company s PR image 28% There have been some studies that reported a correlation between retention and tuition reimbursement. A recent study by Colleen Flaherty of Stanford University established that indeed, tuition reimbursement programs provided general human capital, as opposed to firm-specific human capital and definitely had an effect on retention of employees over time (7). Peter Capelli at Wharton came to the same conclusion (8). In the CorpU study, fewer than eight percent of all companies measure impact on recruiting well, and just another six percent saying they do it at all. For retention, the numbers are similar, with six percent saying they do it well, and twelve percent saying they do it but it needs improvement. A substantial percentage of companies say that they have plans to measure impact and provide reports. An even larger percentage, however, have no plans to do any impact measurements or follow-up with employees or their managers. These numbers are consistent regardless of which groups own tuition reimbursement, or the size of the companies. This is in keeping with other studies that have been done on tuition reimbursement programs, though the most recent Eduventures study (1) concluded that 45 percent of companies do some measurement around their programs, a number higher than the CorpU study found. The CAEL study indicated that improved productivity and increasing qualifications to do new work were important reasons for a program. But again, nobody is really measuring what effect the programs are having Corporate University Xchange 9

10 Current state of measurement of impact 6 5 Measure the program's impact on our recruiting activities 4 Measure the program's impact on employee retention 3 2 Follow up with participants to determine how the program has impacted their job performance Follow up with managers to determine how the program has impacted an employee's job performance Provide regular reports to senior managers to demonstrate business impact of the programs Do this well now Do this now but needs improvement Not doing this now but plan to No plans to do this Not applicable 2007 Corporate University Xchange 10

11 Participant Eligibility Most companies require full-time employees to spend some time with the company before being eligible for tuition reimbursement, though 37 percent don t have any time requirement at all. Companies with more than 50,000 employees are more likely to provide tuition reimbursement immediately upon hire, with 69 percent saying there is no waiting period. Almost 90 percent of companies require manager approval before participants can take part in any program. Time to eligibility for full-time employees 4 35% 3 25% 2 15% 5% Immediately 60 days after hiring date 90 days after hiring date 6 months 1 year Never Other Part-time employees are never eligible for tuition assistance in 45 percent of the companies surveyed. That number is slightly smaller (39 percent), when L&D is responsible for the program. There are some companies, like UPS, that are well-known for enabling even part-time employees to benefit from tuition reimbursement; there it s a selling point for new employees, and definitely increases retention, as people tend to stay even after receiving their degrees (9). Time to eligibility for part-time employees 5 45% 4 35% 3 25% 2 15% Immediately 60 days after hiring date 90 days after hiring date 6 months 1 year Never Other 5% 2007 Corporate University Xchange 11

12 What can participants study? Companies are very supportive of employees earning degrees, with more than half supporting any subject that is part of a degree program. However, 43 percent of companies only pay for subjects related to an individual s current job role, with 22 percent further restricting reimbursement to those subjects identified in an Individual Development Plan. The company s philosophy definitely plays a role here. One company we interviewed commented that, while there is often a pendulum shift in this regard, at this time the pendulum favors the attitude that diversity of thought is a strength and so any learning is supported. Another company paid on a two-tier scale 100 percent for job-related activities, and 50 percent even if the courses were not job related. Some of the Other responses were interesting. Many companies include future job roles as a criteria for approving courses, some will approve courses that relate to general business-related topics, others restrict the program to those developing skill sets that could be in short supply. 6 Subjects eligible for reimbursement 5 4 Any subject Any that are part of a degree program 3 2 Only those related to their current job role Only those related to their Individual Development Plan As part of a job-related certificate program Other The aggregate above doesn t tell the whole story, however. There is a subtle shift when the tuition reimbursement program is the responsibility of L&D. In those companies, 45 percent say they support learning in any subject with 49 percent restricting employees to subjects related to job role. In those where HR has responsibility, those percentages are 52 percent in any subject and 40 percent related to job role. Company size also plays a part in how restrictive the policy is, with the largest companies in the survey population being more restrictive. Interestingly, within the group of companies interviewed for this report, it was the largest companies that had no restrictions, feeling, like United Technologies Lee Dailey, director of executive and management development at United 2007 Corporate University Xchange 12

13 Technologies, that renaissance men and women are important to the company s growth. United Technologies backs up that view with an Employee Scholars program that pays 100 percent of tuition, enables paid time off, and has a 15 percent enrollment rate (10). Course restrictions by company size Overall employees 5,000-19,999 employees 20,000-49,999 employees Over 50,000 employees In any subject 13% 13% 16% 19% 15% In any subject that is part of a degree program % 44% 31% Only in subjects related to their current job role 43% 45% 37% 31% 69% Only in subjects related to their Individual 25% 23% 18% 25% 31% Development Plan As part of a job-related certificate program 36% 43% 34% 38% 15% Other 3 26% 29% 44% 38% Other distinctions show up when industry is considered, with manufacturing giving degree and certificate programs a high degree of attention, and finance being more restrictive than most when it comes to the type of program. Finance companies that answered other were apt to approve general business courses related to future job roles or specific company needs. Course restrictions by company size Overall Construction Finance Professional Services Manufacturing Healthcare In any subject 13% 12% 11% 5% In any subject that is part of a degree % 43% 79% 45% program Only in subjects related to their 43% 38% 47% 36% 37% 35% current job role Only in subjects related to their Individual 25% 38% 18% 21% 32% Development Plan As part of a jobrelated certificate 36% 25% 41% 36% 42% 2 program Other 3 25% 47% 43% 32% 25% 2007 Corporate University Xchange 13

14 Where can they study? Most companies will accept courses at an accredited college or university, though there are some that have an approved list of institutions to which employees are limited. Intel, in November of last year, instituted a policy that provided reimbursement only for attending business classes at institutions accredited by the Association to Advance Collegiate Schools of Business and engineering classes taken at institutions accredited by ABET, formerly the Accreditation Board for Engineering and Technology (11). This eliminated 100 schools from their 300-school list including many of the for-profit on-line institutions. Many companies limit the schools that MBA students can attend, and one of the survey respondents limits reimbursement to just one school the local state university. Courses and colleges eligible for reimbursement Any courses Any courses at an accredited college or university Any courses at institutions on an approved list Only courses on an approved list 2007 Corporate University Xchange 14

15 Acceptability of online learning Online colleges and universities are always acceptable for just over half of companies surveyed, while 46 percent of companies accept them sometimes. Some companies are still not sure that the accreditation process for online colleges is as robust as it is for brick and mortar facilities, and the proliferation of accrediting bodies sometimes makes it difficult for program administrators to sort out those that meet a company s standards. Other companies accept appropriately accredited online colleges and universities because they feel that the online option is incredibly valuable for those people who otherwise would be unable to even consider furthering their education. Acceptablity of online college or university courses Always Sometimes 2 Never 2007 Corporate University Xchange 15

16 Program Reimbursement Most companies limit tuition reimbursement spending, though most companies don t make any distinction between job roles when they do. For this survey population, 77 percent responded that the limits were the same regardless of job role. Their responses are indicated as All job roles in the following charts. For non-degree courses, which would include certifications and licensing, that limit tends to be lower overall than it is for any degree or degree-level programs, averaging almost $3200 for those companies that impose limits (15 percent of companies do not) with 47 percent in the lowest $ range. The lower average is, undoubtedly, due to the fact that those expenses, even if they are administered internally as part of a tuition reimbursement program, are not deductible as tuition expenses according to U.S. Internal Revenue Service rules. Reimbursement limits for Non-degree courses All Job Roles 3 Individual Contributor 2 1st Level Supervisor/Manager Mid-level Manager Senior Manager $0-$2999 $3000- $3999 $4,000- $4999 $5,000- $6,999 $7,000- $8,999 $9,000- $10,999 There is no limit For bachelor s level courses, the average limit for the all job roles group goes up a thousand dollars, to almost $4200, with the largest number of companies in the $5000-$6999 range, which is not surprising, considering that Section 127 of the U.S. Internal Revenue Code sets a limit of $5,250 beyond which tuition expenses are not deductible for employers and the excess is treated as taxable to employees. The limits for all the degree-granting programs for the all job roles group, actually, are very close, with Masters program limits at an average of over $4300, and Ph.D. level programs at $4000. Companies that differentiate by job role generally have higher limits than those that don t. And about 35 percent of companies impose no limits on tuition expenses for Senior Managers Corporate University Xchange 16

17 Reimbursement limits for Bachelor's level courses 4 35% 3 25% 2 15% 5% All Job Roles Individual Contributor 1st Level Supervisor/Manager Mid-level Manager Senior Manager $0-$2999 $3000- $3999 $4,000- $4999 $5,000- $6,999 $7,000- $8,999 $9,000- $10,999 There is no limit 4 Reimbursement limits for Master's level courses 35% 3 25% 2 All Job Roles Individual Contributor 15% 1st Level Supervisor/Manager Mid-level Manager Senior Manager 5% $0-$2999 $3000- $3999 $4,000- $4999 $5,000- $6,999 $7,000- $8,999 $9,000- $10,999 There is no limit 2007 Corporate University Xchange 17

18 4 Reimbursement limits for Ph.D. level courses 35% 3 25% 2 All Job Roles Individual Contributor 15% 1st Level Supervisor/Manager Mid-level Manager Senior Manager 5% $0-$2999 $3000- $3999 $4,000- $4999 $5,000- $6,999 $7,000- $8,999 $9,000- $10,999 There is no limit Only 30 percent of companies limit the number of courses someone can take. Of those that do impose limits, almost 80 percent impose a limit of less than 6 courses a year, with almost a third having a limit of exactly that number. The level of program does not affect these limits Corporate University Xchange 18

19 Other Expenses More than half the companies surveyed cover application fees, textbooks, laboratory and registration fees. These are allowed expenses under the U.S. tax code. 8 Other expenses covered by tuition reimbursement programs Application Fees Textbooks Computer Equipment Graduation Fees Laboratory Fees Late Fees Library Fees Registration Fees Travel Other 2007 Corporate University Xchange 19

20 Payment Terms and Timing The most common mechanism of payment for tuition reimbursement is following successful completion of a course with a grade of C or better (71 percent) with 22 percent requiring a B grade for reimbursement. Companies that have L&D manage their tuition reimbursement programs are more likely to require a B grade (30 percent), Only twenty-five percent of companies provide assistance upon course registration and manager approval. According to John Zappa of the Center for Adult and Experiential Learning (CAEL), companies that pre-pay tuition have a 14 percent rate of participation compared with 5 percent for companies that pay following completion (12). Prepayment addresses the concern that some companies expressed that younger employees might not be able to find the upfront cash to begin a program. To address this, one of the companies interviewed during this study has an interesting hybrid arrangement with a well-respected, accredited local college that enables the company s employees to enroll without paying upfront with the college trusting that payment will be forthcoming. As a result, percent of their participating employees go to this one college. 8 Timing of tuition reimbursement payment Upon course registration and manager approval Following successful completion of a course with any passing grade (C or better) Following successful completion of a course with at least a B On a sliding scale with the percentage depending on the grade received Directly to the school 2 To the employee Half upfront, half when course is completed Other 2007 Corporate University Xchange 20

21 Global Considerations Most companies have separate programs for employees outside their headquarters countries. This makes a great deal of sense since legal and tax requirements are different, accrediting bodies are generally local rather than international, and the staff that administers the program will have a much better sense of what institutions will be able to meet corporate needs. 25% Employee's participation in tuition reimbursement outside a headquarters country 2 Yes, at any college or university accredited in their own country 15% Yes, but only at colleges or universities with affiliates in the headquarters country Yes, but only with headquarters approval No 5% Other 2007 Corporate University Xchange 21

22 The Participant s Obligation Most companies (57 percent) impose no obligation on employees to remain with the company upon completion of a degree program. The answers here seem slightly contradictory, as only 22 percent of companies say they obligate employees to stay a pre-defined number of years, while 41 percent require reimbursement if a participant leaves before the required time has passed. Even companies that impose reimbursement requirements indicated that they have a difficult time collecting the money owed, so most companies prefer to remove this requirement. Some industries are stricter about this than others. Healthcare, for example, imposes an obligation in 53 percent of the company s surveyed and expects repayment, while in construction, 75 percent of companies impose no such obligation. Obligation upon completion of a degree program No obligation to remain with the company 3 2 To stay with the company a pre-defined number of years To reimburse the company if they leave before the required time has passed Other 2007 Corporate University Xchange 22

23 Plan Utilization Participation The overall average participation for companies in this survey is 5.2 percent, with the largest number of companies reporting just percent participation. When L&D is in charge of the program, that number goes up to 6.2 percent. CAEL cites a higher figure of 8.1 percent in their most recent survey (3). 35% Percentage of eligible employees participating in tuition reimbursement programs 3 25% 2 15% 0-2% 2.1-4% 4.1-6% 6.1-8% 5% 8.1- More than There are two company-size pockets with higher percentages of employees participating as seen below. There are also fewer employees with high levels of participation in the 20,000-49,999 employee companies. Actual participation (company size) Overall employees 5,000-19,999 employees 20,000-49,999 employees Over 50,000 employees 0-2% 19% 24% 8% 7% 17% 2.1-4% 32% 33% 22% 53% 42% 4.1-6% 17% 15% 11% 33% 8% 6.1-8% 7% 11% 17% 8.1-6% 4% 11% More than 17% 13% 31% 7% 33% 2007 Corporate University Xchange 23

24 Half of companies reported that the number of participants in these programs is increasing, with only 7 percent seeing a decrease in the use of this employee benefit. Most companies are comfortable with the level of participation in their tuition reimbursement programs, with 70 percent responding that the level is acceptable, 2 percent feeling that it s excessive, and the 28 percent responding that participation is less than they would like to see. When asked why they thought participation was low, the majority answered that employees don t have time (68 percent) with others feeling that marketing (48 percent) and employees not seeing the value (45 percent) also given as reasons. The value issue also shows up in the credentials response, with 15 percent of companies stating that credentials are not valued within the company. Reasons for lack of participation 7 6 Marketing Employees don't see value Program is too restrictive Employees don't have time Managers don't/won't approve Credentials not valued within the company 2007 Corporate University Xchange 24

25 Actual Spend The overall averages for actual spend are $1600 for non-degree courses, $3400 for Bachelor s level courses, and $4500 for both Master s and Ph.D. level courses. Average spend per participating employee Non-degree courses Bachelor s Level Courses Master s Level Courses Ph.D. Level Courses $0-$1999 $2,000- $2,999 $3000- $3999 $4,000- $4999 $5,000- $6,999 $7,000- $8,999 $9,000 or more 2007 Corporate University Xchange 25

26 Plan Changes Made Most tuition reimbursement plans have stayed the same in the year preceding the study (the chart does not show the Not Applicable answers). When changes are indicated, they are likely to involve increases or additions. The Intel change discussed earlier is a rarity. The most likely increases were to the list of approved schools and/or courses, and with the integration of tuition reimbursement with Individual Development Plans. Changes have been made to eligibility requirements in almost 12 percent of companies. Changes made during the past year 14% 12% 8% List of approved schools and/or courses Dollar cap Number of courses allowed Eligibility requirements 6% 4% 2% Increased Decreased Added Changed Integration with Individual Development Plan Integration of tuition reimbursement with L&D Management of program moved to L&D from HR Manager approval process Online providers as part of the program External vendor for administration 2007 Corporate University Xchange 26

27 Changes Planned The coming year will see lots more changes than the previous year, according to the study participants. Over 25 percent plan to add integration with IDPs, and over 20 percent will increase their dollar cap. And 16 percent will integrate tuition reimbursement with L&D. This is consonant with the interest that Corporate University Xchange has seen in this topic among its members, with many of them looking to redesign or at least revisit their programs. 3 Changes planned for the coming year 25% 2 List of approved schools and/or courses Dollar cap Number of courses allowed 15% 5% Increase Decrease Add Eligibility requirements Integration with Individual Development Plan Integration of tuition reimbursement with L&D Management of program to L&D from HR Manager approval process Status of online providers as part of the program To an external vendor for administration 2007 Corporate University Xchange 27

28 Conclusions Tuition reimbursement is a valued program to those employees that take advantage of it, and is definitely looked upon as a checkmark benefit for someone joining a company. It is, however, money being spent without the kind of controls that are seen when discussing other benefits. To quote Andy Meisler (10): In an era when benefits like health care, profit sharing and pensions are examined microscopically, haggled over and periodically put through the wringer to reduce costs, tuition reimbursement remains a placid vestige of unexamined corporate benevolence. What s clear to our survey participants is that change has to take place. A tuition reimbursement program has to return value for the money invested, and, like any program, there has to be a clear and compelling reason for it. Just as Corporate University Xchange emphasizes the need to understand the strategic business reason for any new learning initiative, so too do the people administering tuition programs have to understand what their leaders expect them to deliver. Sometimes, as in United Technologies case and others, there is a firm belief that all learning is worthwhile, and no justification or tracking is required. But even in companies that espouse that culture, there is a need to know that the education being supported is of sufficient quality to make the expected contribution even if that contribution is nebulously defined as making us smarter or contributing to diversity of thought. That will mean greater scrutiny of the programs being used and will require that programs are committed to looking at the individuals that graduated to see if their careers were really affected by the experience. Keeping track Keeping track of tuition reimbursement and its impact is a lot like keeping track of learning and development in general. It starts with the basics. Tracking basic business measures is a start. How many applications were reviewed in the specified turn-around time, how promptly were people paid, how well were customers served? Then it moves to financial measures. How much did the program cost? And what percentage of the workforce is affected? What schools did they go to and what kinds of degrees did they get? Keeping track of all of this is one of the strengths of the various outsourced solutions. Companies that have employee development goals such as improved productivity and preparing people for new roles are going to have to find ways to tease out the contribution of the tuition reimbursement program from other learning, and external factors. This is not an easy task, and it s really something that can t be done quickly. It starts with measuring who is taking advantage of the program. What is their demographic make-up? Does this match the profile of the people that business leaders want to see advance in their careers? Are they studying the right things? Does there need to be more advising and counseling? And then they need to be followed. For years. That following of participants is the step that simply isn t happening now. Managers have to approve participation, but they are never asked whether the programs have changed the employee in any significant way. It s like the Kirkpatrick Level 3 in learning; has there been a change in behavior attributable to the college or university program? And then companies have to move beyond that to Level 4 business results and even ROI Corporate University Xchange 28

29 Using the dollars well Simply shifting all tuition reimbursement dollars to L&D is not a guarantee that the money will be accounted for and the strategic needs of the business met any more effectively. But, as companies move toward an overarching Talent Management strategy to meet their human capital needs, what will be critical is taking a fresh look at this useful investment in people to be sure it has clear goals, measurable outputs, and the right kind of support at all levels to be worthwhile. References (1) Eduventures. Tuition Assistance Plan Benchmark: Managing TAP as a Strategic Asset, 2003 (2) American Society for Training & Development, State of the Industry in Leading Enterprises, (3) Council for Adult and Experiential Learning, The Promise & Practice of Employer Educational Assistance Programs, 2004 State of the Field Strategies and Trends, (4) (5) (6) (7) Flaherty, Colleen. SIEPR Discussion Paper No The Effect of Employer Provided General Training on Turnover: Examination of Tuition Reimbursement Programs, February (8) Cappelli, Peter, 2004, Why do employers pay for college? Journal of Econometrics, 121: (9) Hammers, Maryann. Wanted: part-timers with class - Well Done - UPS launches Earn and Learn, Workforce, June 2003 (10) Meisler, Andy. A Matter of Degrees Workforce Management, May (11) Woo, Stu. Intel Cuts 100 Colleges From Its Tuition-Reimbursement Program for Employees, The Chronicle of Higher Education: Money and Management, February 2, (12) Zappa, John. Tuition Assistance The Missed Opportunity, presented at WorkforcePhiladelphia2.0, 2007 About Corporate University Xchange, Inc. Corporate University Xchange (CorpU) is the leading provider of corporate university research, benchmarking, and advisory services for helping organizations transform corporate learning. Founded in 1997, the aim of CorpU research and services is to maximize corporate investments in training and development to deliver improved business results. The company s benchmarking studies and annual awards programs set the standards for the learning industry. For information, please visit CorpU on the web at Corporate University Xchange 29