How Companies Benefit from a Providing an Employee Education Program
The benefits of tuition reimbursement programs have been experienced by employers and employees for many years. The costs of higher education can be extraordinary in many cases. Expenses for college students often go beyond tuition. A company offering tuition reimbursement can help individuals obtain an education who would not previously have been able to get one. Companies who invest in their employees’ education will not only incentivize their employees but also have more qualified employees.
Gen Z And Millennials
Education reimbursement programs are attractive to Millennials. This is the generation that now makes up most of the workforce in the United States. A survey was done of those in Human Resources who were decision-makers. Over 48 percent of survey participants were focused on attracting those from Gen Z as well as Millennials. The survey also showed more than 61 percent of companies worried about not attracting or retaining enough Gen Z or Millennial employees and how it could harm their business.
More Capable Workforce
It has been proven the level of education obtained by college graduates is a point of frustration for many employers. There was a survey conducted that illustrated approximately 11 percent of employers felt students had the competencies and skills needed by their business. Over 16 percent of those who responded felt strongly that graduates did not have the knowledge and skills needed by their business. Tuition reimbursement is a way for a company to help a promising employee obtain the skill level needed. It is an effective way to close a talent gap and make certain they have a workforce that is better prepared for the changing future.
Incentivize Workers
An effective education reimbursement program provides a company’s Human Resources department with the ability to incentivize workers who know how a company operates and how to perform their job. These are workers who have the skills a person can’t obtain from an academic education alone. This includes creative problem-solving, collaboration, relationship building, task prioritization, team management, organization, and more. It is a way to further develop promising employees into major-league contributors.
Reduce Turnover
Many companies must compete for talented employees. Employers have learned to develop employee loyalty with the use of tuition reimbursement programs contained within contractual stipulations. This will guarantee that a company offering this benefit will have turnover-proof employees for an extended amount of time. This is considered a relatively risk-free investment in a company’s workforce.
Tax Savings
A company can experience significant savings when their turnover rates and related costs decrease significantly. Section 132 of the Internal Revenue Code (IRC) makes it possible for employers to include reimbursement expenses that are related to an employee’s job. They are not reimbursable for an employee’s income for their tax purposes. This is the type of benefit a company can also offer to volunteers, independent contractors, business partners as well as directors, and more.
*There isn’t any dollar limitation involving education fringe benefits that follow Section 132.
*Under Section 132, all educational courses are required to be job-related.
*Educational-related equipment, as well as tuition, supplies, books, and more are eligible for reimbursement. Section 132 also permits employers to cover an employee’s costs associated with necessary transportation, employee meals as well as the lodging involved with qualified courses, and more.
Performance
Many employers have tied their rate of reimbursement based to an employee’s performance during their education. Many provide their employees with a scale. Obtaining an “A” gets full reimbursement and anything below a “C” may not be eligible for reimbursement.
Program Of Study
A company often has a condition of only permitting certain types of courses for its educational reimbursement program. It is common for employers to have a requirement the courses or degrees apply to the type of work the company performs. If a company is an accounting firm, it may only provide educational reimbursement for accounting related courses or degrees.
Having the ability to take advantage of a company’s reimbursement plan, an employee won’t have to worry about getting a college scholarship or paying back a student loan. They will often have the cost of books, tuition, and more reimbursed. Many courses meet the requirement of companies. Companies have learned when their employees access their tuition reimbursement program, they stay with the company longer. The company has employees who are easier to promote and save the investment required to recruit new employees and more.
