How Does Tuition Reimbursement Benefit a Company?


Tuition reimbursement programs have obvious benefits for employees--the opportunity to pursue higher education at reduced or no cost is a superlative benefit, hands down. However, tuition reimbursement has benefits for employers, as well. Better educated employees can better serve their organization, and educating employees in areas where you lack talent can help prevent costly hiring mistakes. Additionally, offering tuition reimbursement makes your organization more appealing to up-and-coming talent.

Better-Educated Employees

That better-educated employees will benefit your organization is a given. While course work that is pertinent to your field will quite obviously make your employees better equipped to perform their job duties, any educational opportunity offers growth.

"A well-trained work force is an important productivity enhancement," according to HR World's David Hakala. Employees with more education and training are better able to achieve both their and the organization's goals, as well.

Dedicated Employees

The myth that tuition reimbursement programs allow employees to attain valuable training and degrees that they will then take to other employers is just that--a myth. Tuition reimbursement programs often create even more dedicated employees who are appreciative of the benefit.

Research in the "Academy of Management Journal" found that employees stick with employers that offer opportunities for higher education, leaving only if they are not promoted after they complete their degree, in this case a master's degree.

Competetive Edge

Employers who offer tuition reimbursement programs often do so in a package of other attractive benefits that make them appealing to talented potential employees.
High-performing new employees are attracted to businesses that offer them opportunities for growth and demonstrate--often through generous benefits--that they are valued. Tuition reimbursement programs can do both, making your organization a place where the best in your field want to work.

Succession Success

As employees retire and otherwise separate from your company, being able to find qualified candidates for these positions is often a challenge. Tuition reimbursement programs allow you to "grow your own" senior executives by assisting employees in simultaneously getting the education and experience they need to guide your organization in the future.

To better facilitate succession through tuition reimbursement, companies should select employees eligible for reimbursement with an eye toward the future.

Tax Help

When it comes to the bottom line, tuition reimbursement is a good idea for companies, tax-wise. Organizations can provide their employees a maximum of $5,250 in tuition reimbursement money each year, tax-free. In other words, if five employees take the maximum $5,250 in tuition reimbursement per year, that's over $26,000 in tax credits for the employer.

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