It's no secret that a low turnover rate will help your business grow. This helps you avoid spending time on training, keep your employees happy, and therefore help position you as a place that people want to work and keeps you competitive. One of the top ways to help keep your turnover rate low is offering good employee benefits, which brings us to one benefit in particular--employee tuition assistance.
At first it may seem a little bit nerve-racking to offer tuition assistance as an added employee benefit, but there are many different avenues you can take depending on what works for your business financially. For example, some employers only offer to help pay for higher education for employees who have been with the company for three years, some offer this only to salaried employees, offer this benefit up to a certain dollar amount, only in certain fields of study, minimum GPA requirements, etc. It's up to you to decide how to make it work for you're your bottom line and your employees.
The Pros to Education Tuition Assistance for Your Employees
- Your employees will improve their professional skills. It's important to always continue learning. The more your employees know the more they can help transfer what they're learning to their work at your business.
- It helps encourage hard work, loyalty, and motivation. As discussed in the introduction, this benefit will help give employees yet another goal to work toward in your business. Because the benefit is so directly personal, it keeps motivation high.
- You can deduct this benefit as a business expense. This will help you save on taxes. According to the IRS, you can offer up to $5,250 per year, per employee and deduct it as a business expense.
As an example, Chipotle just announced this past June that they will give all employees, both salaried and part time, tuition reimbursement as a way to keep their turnover rate to a minimum and incentive employees to stay with the company. According to an Eater article, Chipotle says, "Our platform is built around opportunity. We open a new restaurant every two days. Last year, we promoted 10,000 employees at the restaurant level into management positions."
Starbucks also uses this approach within their company after striking up a partnership with Arizona State University, which you can learn more about here.
The Cons to Education Tuition Assistance for Your Employees
- It will be costly. This one is obvious. Even when you don't offer to pay an employee's full tuition, the cost can still add up.
- Employees could become overwhelmed. Although employees may be more motivated to work for you at first, there is a chance that going to school at night or on weekends in addition to a full time job would be too much to handle and cause their work to suffer.
- Employees could leave if you're not careful. If you are going to offer and education benefit, it's wise to make sure that the employee stays with you a certain amount of time after completing their coursework so that he/she doesn't use the benefit and then leave your company. However, this can be hard to enforce legally.
As discussed above, there can be different pros and cons depending on how you're going to go about offering this assistance and what parameters you're going to put on the benefit. However, ultimately you have to decide what works best for your business.