TM - April 2008 - (Page 37) Should Education Benefits Be Work Related? Daniel Margolis One potential wild card in administering a tuition assistance program is whether or not the education being paid for has to be work related. College courses, after all, can be about almost anything. While an employer wants to see employees better themselves, it may not be thrilled to finance them taking a course on the films of Keanu Reeves (yes, such a class exists). Nationwide Mutual Insurance Co. allows its employees $5,250 a year in tuition reimbursement after one year of employment. The only other requirement is the education paid for “has to pass the muster of [being] applicable to the associate’s job,” said Randall Stevens, director of IT recruiting for Nationwide’s talent acquisition department. “So if you’re VP of HR and you’re taking massage therapy classes that probably wouldn’t work. But if you’re looking for specific technical training, we’ll pay for it, smile, whistle and hop down the street.” Believe it or not, some employers are just as happy to pay for any kind of education and, as a result, don’t have job-relatedness requirements built in to their tuition assistance programs. “That’s very rare,” said Heidi Milberg, director of business development for General Physics Corp. “The majority is on the side of job relatedness defined or approved by a supervisor. But there is the other side of the spectrum: open programs just looking for employee development period, [taking the view that] anything that continues their development is going to be a positive experience back on the job.” Industrial manufacturer UTC operates such a program. The company pays in advance for its employees to go to any undergraduate-, graduate- or doctoral-level accredited degree program at any two- or four-year institution, in any field of the employees’ choice. UTC covers the costs of all tuition, academic fees and books up-front; employees do not spend any money out-of-pocket. The company provides them paid time off to study, up to three hours per semester. Furthermore, at the end of their degree program, if employees have completed their degree successfully, UTC rewards them $5,000 U.S. equivalent of stock for an associate’s degree and $10,000 U.S. equivalent of stock for a bachelor’s, master’s or doctoral degree. Laura Osborn, UTC director of learning and development, explained the generous and open nature of UTC’s tuition assistance program was mandated from the highest level of the company: Chairman and CEO George David. “Our CEO George David values education,” she said. “He came out in 1996 and said, ‘I want the besteducated workforce on the planet, and I want to provide open access to education for all employees — equal opportunity.’ We have value in our workforce around education and have the best skills and competencies available to us, and we have senior commitment at the top driving the message that says, ‘That’s important to us.’” Osborn said nothing speaks louder to the value UTC realizes it has in its workforce than the investment it has made in employee tuition assistance. “We’ve been at it for 12 years, and it’s sustained itself,” she said. “We are seeing about 2,500 people graduate each year. We’ve had 23,000 degrees earned with the program, and we’ve invested $688 million dollars. Those program metrics speak for the fact that we are truly committed to this program and see value for our employees.” benefits are not obscured by a compensation process where salary is more heavily prioritized. Laura Osborn, director of learning and development at industrial manufacturer United Technologies Corp. (UTC), said tuition assistance has served as an effective draw for her company. “It’s one of the main reasons people come to work for us,” Osborn said. “When I look each year at who has started a new degree program, 30 percent of those new starts are people who have less than 12 months of tenure with us.” Even if a tuition assistance program is not the main reason a potential hire selects a company, a lack of one still can affect the decision. “I wouldn’t say it’s a key differentiator if you have it, but it’s a key differentiator if you don’t have it,” Milberg said. “If you’re looking for a person just out of college from some of the best schools, it’s a good recruiting tool for them.” UTC also has seen its tuition assistance program function well as a retention tool. “When we look at overall workforce attrition, we retain folks who are either participating or have graduated with a degree through this program 4 percentage points better than the general workforce population,” Osborn said. “We also look at promotion and see that people who go through these programs are promoted at about a 4 percent higher rate than the general workforce population. People who earn their degree may April 2008 COMPENSATION & BENEFITS continued on page 63 talent management magazine www.TalentMgt.com 37 http://www.TalentMgt.com
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