Offering Money for School Pays Off

Caroline Hubble, Jason Mulrooney and Andrew Nelesen - 6/6/12

Tuition assistance, especially when supported by a corporate culture that encourages knowledge transfer, is a catalyst for employee development and engagement.

Tuition assistance (TA) often serves as a catalyst for employees to advance their education, skills and credentials, which employers see as a benefit to both the employee and the organization. Still, as resources become scarcer, questions about TA’s value have become routine.

To address these questions, ROI Institute, EdLink and Capella University created a study on the organizational benefits of offering tuition assistance (Editor’s note: The authors work for these organizations). The Tuition Assistance Value Study suggests that organizations seeking to optimize their investment should require TA users to complete their degree program in a timely manner, create a corporate culture that supports knowledge transfer and include managerial oversight to embed the TA program within the larger talent management context.

The study employed the Phillips ROI Methodology, which includes five levels of evaluation and measurement: reaction, learning, application, impact and return on investment (ROI). The Phillips team created a model that provides a consistent approach to collecting and analyzing data, along with a step to isolate the effects of the program from other influencing factors. EdLink then used its client base to distribute the survey to thousands of learners and graduates from hundreds of different academic institutions, all participants in corporate-funded TA programs. The result was more than 2,000 survey respondents and a statistically significant sample size.

Real Employee and Employer Value
Employer investments in continuing education provide significant value for the individual and employer, according to the study (Figure 1). When respondents were asked to rate the potential benefits of TA programs, the highest favorable ratings were garnered by statements about the value of TA-supported courses — 96.68 percent — and whether the TA program was a good use of organizational resources — 96.67 percent. All categories received favorable ratings of at least 58 percent, and there was little difference in the level of positive response even when factoring in degree type, time spent in the program or whether the respondent had completed his or her program.