Human Resources: Tuition Reimbursement
Q: I would like to offer my employees tuition reimbursement as a means to provide continuing education to them. How do I do this? A: Tuition reimbursement is a great way to provide continuing education to employees. For small organizations withou...
Q: I would like to offer my employees tuition reimbursement as a means to provide continuing education to them. How do I do this?
A: Tuition reimbursement is a great way to provide continuing education to employees. For small organizations without training departments, tuition reimbursement may be the only method of ensuring that your employees are up-to-date on the skills they need to make your company successful. The beauty of these programs is that they can be designed to fit your organization's particular needs. For example, you can choose what types of training programs you will reimburse: tuition from community colleges or four-year universities, training courses offered through trade schools, training programs offered through professional associations, or other training that meets the skills needs of your employees. Many companies limit training that they will reimburse to job-related topics, although there is a growing trend toward reimbursement for any training an employee desires.
A second decision you should make is how much money you will reimburse your employees. Many companies reimburse a percentage of the tuition rather than the entire tuition bill. By requiring employees to pay the difference, companies can minimize the number of employees taking frivolous courses who are not serious about their continuing education. Employees who are committed to continuing their education will be happy for the assistance with the tuition and probably won't mind paying a small percentage of it themselves. Another option to control costs is to allocate a specific dollar amount to each employee for the year. This approach will cap what each employee is allowed to spend, but it does not necessarily allocate training dollars efficiently, as the dollar amount may be too small for employees working toward advanced degrees and may go unused by other employees who are not interested in advancing their knowledge. Finally, almost all organizations provide reimbursement only if the employees successfully complete their courses.
Q: Should all of my employees be eligible for a tuitionreimbursement program orshould I limit who is eligible?
A: Most companies allow all employees to participate in these programs. However, many companies have minimum service requirements to be eligible, such as six months or a year, or a minimum number of hours per week for employees who are not full-time. This minimum service requirement is set to provide a benefit to employees who have shown themselves to be consistent workers for the company. Some companies choose to provide this benefit only to those employees who are part of management training programs or other similarly high-potential programs. While there is some appeal to focusing your training money on these high-potential employees, not providing training to the many other employees in your organization is shortsighted, as these employees are needed to complete the vast majority of the work in your company. Also, by providing training to only those employees identified as "stars," you are sending a message to your other employees that their skills are not important. It is likely that such a message eventually will lead to lower performance from these unappreciated employees, if not higher turnover. However, it does seem smart to set performance minimums for employees to be eligible. For example, eligibility could be linked to average or above-average performance appraisal scores. Whatever criteria you set, offering tuition reimbursement will be a benefit to the employee and employer. It does more than just educate the employee. It provides the employee greater self-esteem and achievement, commitment anda sense of being valued and invested in by the employer, which positively contributes to employee morale.
This column is written by the Northland Human Resource Association, a local chapter of Human Resources Professionals. Please send your questions to firstname.lastname@example.org or NHRA, P.O. Box 16336, Duluth, MN 55816-0336. The Web site is www.northlandhra.org . Disclaimer: This is not legal advice; contact your attorney with specific legal questions.