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Tuition Reimbursement: From Employee Benefit to Strategic Asset


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Title: Tuition Reimbursement: From Employee Benefit to Strategic Asset

Tuition Reimbursement From Employee Benefit to
Strategic Asset
  • Marcia Dresner, Senior Research AnalystCorporate
    University Xchange
  • John Zappa, Senior Vice-President, CAEL

  • About Corporate University Xchange
  • About CAEL
  • Why Offer Tuition Reimbursement
  • The Corporate University Xchange Tuition
    Reimbursement Study
  • Plan Design Practices
  • Changes

Corporate University Xchange
  • Corporate University Xchange (CorpU) is the
    leading provider of corporate university
    research, benchmarking, and advisory services for
    helping organizations transform corporate
  • 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 Corporate University Xchange Awards for
    Excellence and Innovation in Corporate Learning
    are the oldest, most prestigious of the award
  • Our Benchmarking Studies go beyond the numbers to
    determine how companies are developing people.
  • Membership in CorpU includes
  • Unlimited analyst inquiries
  • Webinars presented by practitioners
  • Access to an extensive Research Collaboratory
  • Networking with other members
  • Benchmarking comparisons

About CAEL
  • Council for Adult and Experiential Learning
  • A 501(c)3 non-profit organization with global
    reach and over 30 years of workforce experience
  • Mission to create and manage learning strategies
    for working adults

Tuition Assistance and CAEL
  • Over 20 years experience defining and managing
    tuition assistance programs
  • Broad base of established clients
  • CAEL served over 60,000 employees seeking tuition
    assistance from their employers
  • Over 700,000 adults are eligible for tuition
    assistance programs managed by CAEL
  • Processed 170 million in education funds

CAEL Services
Why Offer Tuition Assistance
Source CAEL 2004 Tuition Survey
Supply of Human Capital
Labor Force 25 44 years
Source U.S. Census Data, Creating Value with
Human Capital Investment, Dr. Michael Echols,
Bellevue University
Poll Question 1
My company considers tuition assistance
  • A check-box employee benefit
  • Part of the employee value proposition for
    recruiting and retention
  • A program that can support learning and
    development goals
  • An important component to support talent
    management initiatives

The Tuition Reimbursement Study
  • Released in August 2007
  • 180 Organizations surveyed, ranging in size from
    100 employees to over 100,000.

Source Corporate University Xchange Tuition
Reimbursement Study 2007
Industries Represented
Source Corporate University Xchange Tuition
Reimbursement Study 2007
Plan Design - Ownership
  • Tuition Reimbursement is primarily the
  • of Human Resources Departments.
  • In large companies (gt50,000) and in the
    manufacturing industries, LD takes a much larger

Source Corporate University Xchange Tuition
Reimbursement Study 2007
Plan Design What
Source Corporate University Xchange Tuition
Reimbursement Study 2007
Plan Design - Where
Source CAEL
Plan Design Where
  • Accreditation is key, with more than 70 percent
    of companies requiring that a college or
    university be accredited before they will pay.
  • Some companies, like Intel, go farther and
    specify which accrediting bodies are acceptable.
  • On-line colleges and universities are always
    acceptable at more than half of companies, and
    sometimes acceptable at another 47 percent.

Plan Design -- Accreditation
  • Accreditation is a quality assurance process, not
    a license to operate
  • Three types
  • Regional Accreditation (evaluates entire
  • National Accreditation (single purpose i.e.
    distance education)
  • Professional Accreditation (specific program such
    as engineering or business school)
  • Most employers accept Regional Accreditation as
    the gold standard for undergraduate degrees.
  • For more information check out Council for Higher
    Education Accreditation (

Qualcomm Choosing Schools
  • Qualcomms tuition assistance program supports
    both business requirements and an employee career
    development philosophy.
  • About 180 approved classroom-based schools are
    approved for reimbursement, approximately 40 of
    which are outside of the US. Six distance-only
    programs approved. Schools are added to the list
    upon request and when Qualcomm establishes new
  • Key criteria used for approving schools include
  • Is the school a not-for-profit institution? Is it
    accredited? What is its ongoing reputation for
    quality education/research?
  • Is it near a Qualcomm office?
  • Are faculty professional educators/researchers?
    Is 50 percent or more of faculty employed
  • Are Qualcomm-business relevant subjects and
    degree programs offered?
  • Is original research conducted by either the
    school or faculty?

Plan Design Dollars
  • Companies are generous in the limits put on
    tuition reimbursement.
  • 77 percent of companies have the same limits
    regardless of job role (shown below).
  • Those that dont have the same limits for
    everyone generally have higher limits than those
    that do.

Source Corporate University Xchange Tuition
Reimbursement Study 2007
Plan Design Payment Terms and Timing
  • Over 70 percent of companies pay following course
    completion with a grade of C or better.
  • Only 25 percent pay upon registration and manager

Source Corporate University Xchange Tuition
Reimbursement Study 2007
Plan Design Payment Terms and Timing
  • Two Relevant Models
  • Traditional Reimbursement
  • Prepayment/Voucher Option
  • Why offer Prepayment Option?
  • Attractive Incentive for front-line staff
  • Eliminates out of pocket expense
  • Strategy for engaging new employees
  • Increase program utilization 5?12

Plan Design Service Agreements
Source Corporate University Xchange Tuition
Reimbursement Study 2007
Practices - Participation Rates
  • The overall average participation reported was
    5.2 percent, with the largest number of companies
    reporting just 2.1-4 percent participation.
  • When LD is in charge of the program, that number
    goes up to 6.2 percent.
  • About 28 percent of respondents felt that
    participation was too low.

Source Corporate University Xchange Tuition
Reimbursement Study 2007
Poll Question 2
What is the primary method you use to increase
program participation?
  • We do not encourage usage
  • Managers are encouraged to discuss tuition
    assistance as part of the career development
  • The value of the program is promoted to employees
    (e.g. intranet, information provided during
    orientation, company newsletters, etc.)
  • Employees are recognized and rewarded for using
    the program (e.g. awards, success stories are
    promoted, stock incentives, etc.)

Practices - Spending
  • The overall averages for actual spend per year
    are 1600 for non-degree courses, 3400 for
    Bachelors level courses, and 4500 for both
    Masters and Ph.D. level courses.

Source Corporate University Xchange Tuition
Reimbursement Study 2007
Real Market Price of Tuition
Source The Market Price of Tuition, CAEL and
Bellevue Universitys Human Capital Lab, November
Sample Case Study
  • Bachelors Degree in Business
  • Approximately 120 -128 credits
  • 323 per credit hour
  • Employee is taking 20 credits per year
  • Completes in 6 years
  • Year 1 6460 plus fees and books
  • Six year cost 45,060

Practices - Measurement
  • Most companies justify the dollars spent for
    tuition reimbursement as part of an employee
    value proposition that attracts and retains
  • The most recent Eduventures study concluded that
    45 percent of companies do some measurement
    around their programs.
  • When the CorpU study asked a question about
    measuring the impact of the programs, a totally
    different picture emerged.

Practices - Measurement
Source Corporate University Xchange Tuition
Reimbursement Study 2007
Case Study Verizon Wireless
  • Nations most reliable wireless network
  • Over 64 million wireless customers
  • 70,000 employees in 49 states
  • Ranked 4 in Training Magazines Top 125
    companies for 2007

LearningLINK Tuition Program
  • Encourage and assist employees in achieving their
    educational and career development goals
  • Build critical organizational competencies and
  • Attract and retain the very best employees

Measure Outcomes
  • Recruitment
  • Retention
  • Career Mobility
  • Job Performance

  • 36 of LearningLINK participants surveyed felt
    the tuition assistance program was a definite
    factor in their decision to accept employment at
    Verizon Wireless
  • 19 of LearningLINK participants surveyed felt
    the tuition assistance program was probably a
    factor in their employment decision
  • 42 of LearningLINK participants have been with
    the company 2 years or less
  • 19 have been with the company less than 1 year

Add another graph to show termination rates
96 of LearningLINK participants surveyed said
they intended to stay with Verizon Wireless for
at least two years after completion of their
Career Mobility
Job transfers include promotions, lateral and
developmental moves
Job Performance
  • 4,510 managers of LL participants surveyed
  • 52 of respondents noticed a change in job
    performance and behaviors while employees were
    engaged in LearningLINK program
  • 71 reported improved performance on the job
  • 73 reported improved behaviors on the job

Changes Noted
Retention Value
  • Based on 10,105 participants
  • Average VZW turnover rate of 19
  • Average LearningLINK turnover rate of 8
  • Average FTE re-hire cost of 23,000
  • Program expenses for 2006 were 23.5 million

Caterpillar Clear Goals, Measurement, and More
  • Executive management is clear about the goal To
    develop an internal talent pipeline with people
    prepared for new roles.
  • The tuition assistance program (TAP) managers
    report to senior management exactly who is using
    the program, and what courses of study they are
  • Courses of study are linked to the employees
    development goals, not necessarily to current
  • Articles and success stories about the program
    appear in the internal company newsletter.
  • Graduates are monitored to see if they are
    promoted and retained and are polled about their
    satisfaction with TAP.

Poll Question 3
  • How likely is your organization to strengthen the
    alignment between LD and the Tuition Assistance
  • Were already completely aligned
  • Were planning changes in this direction in the
    coming year
  • Were considering it as a long term strategy
  • Not at all likely

Practices Integration with Development
Source Corporate University Xchange Tuition
Reimbursement Study 2007
Source Corporate University Xchange Tuition
Reimbursement Study 2007
Practices Integration with LD
  • Leverage Preferred Educational Provider Networks
    for Tuition Discounts
  • Leverage In-House courses
  • Review Courses of Study and Types of Degrees
  • Certification Prep or Continuing Education Course
  • ACE College Credit Recommendation Services
  • Improve the Experience for Employees
  • Integrate the tuition assistance website with
    in-house education options and featured education
  • Encourage employees to consider in-house
    education options
  • Promote information on Prior Learning Assessment

Change is Coming
  • The table shows that many organizations are
    comfortable enough to keep their plans as is.
  • But there are more companies willing to increase
    the money allowed, and integrate tuition
    reimbursement with IDPs and LD.

Source Corporate University Xchange Tuition
Reimbursement Study 2007
Increase the Programs Value
  • Communicate About the Skills and Credentials That
    The Company Needs and Values (Internal
    communications, IDPs, internal job postings)
  • Enlist the efforts of managers and corporate
    leaders to promote a learning culture
  • Walk the talk by showcasing success stories and
    demonstrating the value of making the effort

Make the Program a Strategic Asset
As the talent shortage intensifies, you have the
potential to reshape and reposition your tuition
program to support and grow talent. Dont
miss that opportunity!
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