TM - April 2008 - (Page 63) COMPENSATION & BENEFITS continued from page 37 move from the position they’re in but generally stay inside the company.” Milberg said this type of ROI on tuition assistance program benefits is what makes them effective. “It depends on how a company leverages the information and is able to show success and promote from within,” she explained. “If a company tracks degree completion and majors, and where people’s skills are, it allows them to leverage that in making recruiting decisions and give opportunities to those within the company.” Yet not many companies are doing this. Milberg said most companies make due with a manual process, using Excel spreadsheets or internally developed databases to track tuition assistance applications and make payments. In this situation, an organization acts as a bank for its employees and does not use tuition assistance’s full value as a talent management “The employee, when he’s out there trying to get his education, he’s showing an interest in his own personal growth and development, and an employer should take advantage of that,” said Griffin. “The employee thinks, ‘What am I doing this for?’ and, ‘Well, I have these new skills. I want to use them.’ They’re chomping at the bit and may decide to go elsewhere.” But what if the employee goes elsewhere anyway? That’s the main detractor for tuition assistance: “What if I pay for their education and then they quit?” But no matter what level of loyalty exists, an employee’s level of education or knowledge is transient and can be taken elsewhere at any time. Plus, organizations can build safeguards against this risk. “It is a risk, but the tuition policy helps to mitigate that risk,” Milberg said. “A lot of the policies we see have a repayment clause in them where they might say, for each year of your degree completed, you have to stay a year with the company or you owe the money back. On top of that, a few of the companies I’ve worked with that have done analysis internally on retention, the numbers show that the higher the education of the people that are using the program, the more likely they are to leverage what the company is offering them and find opportunities within the company. They feel more loyal to the organization that’s provided the benefit to them.” Another potential risk in a tuition assistance program is that encouraging employees to seek further education may serve as a distraction from their ability to perform their regular job functions. After all, if employees are in the classroom, they’re likely not at work. Again, however, safeguards can be put in place to counteract this risk. “The majority of the programs I see specify that courses cannot take away from any work hours,” Milberg said. “Several of them put limits on the number of courses they pay for per semester.” On the other hand, Milberg said she has worked with programs that allow work-time credit for studying. In that case, depending on the number of credit hours taken, an organization may offer a certain number of hours per week that employees can take off work to study. UTC’s program is set up to allow the company to handle such situations on a case-by-case basis, and it does allow paid time off to attend classes and study. “The policy is flexible so that the supervisors with this paid-time-off approach have the right to refuse a request if it is going to impact a work deliverable,” Osborn said. “The employee and the supervisor mutually agree to what’s an appropriate use of that paid time off, and we don’t hear many issues. The folks using the program are upwardly mobile, go-getter type personalities, highly motivated to utilize that benefit to enhance their own career.” Encouraging employees to take part in tuition assistance programs and facilitating the flexibility necessary for them to do so amounts to a substantial benefit, albeit not a tangibly monetary one. 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. tool. Nor will the organization get the most from the investment. “It’s not necessarily the applications and the payments, but tapping into that information and using it beyond just managing the program,” Milberg said. “If organizations tap into that information, and they’re able to then leverage it from a career path perspective, it’s a bigger picture.” Organizations may have to establish oversight of a tuition assistance program and make conscious decisions about how it should fit into the business. “That’s how it fits, really, into talent management,” Milberg said. “The planning has to go in up-front, with career paths and skills assessments and all those different things that companies are trying to get their hands around. Once they identify [those priorities], they can take the individual and the information they get from the tuition program and start planning better to fill positions.” Mitigating Risk When considering how to approach tuition assistance programming, organizations often ask whether or not employees feel employers should pay for their education. “I think they should because the employer not only benefits from the new experience, the employee benefits in personal growth,” said Scott Griffin, a microcomputer specialist working for Orange County government in Florida. Since earning a bachelor’s degree in electronics management, Griffin has engaged in continual education, only half of which was paid for by his employers. He said ignoring an employee’s initiative can be perilous. April 2008 talent management magazine www.TalentMgt.com 63 http://www.TalentMgt.com
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