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DiscussionBoard.docxTo: Ken Kovach, Senior Vice President of Human Resources
From: Kristina Ferrel, Accountant III
Date: October 1, 2018
Subject: Improving the Tuition Reimbursement Program
Please find the enclosed report regarding ways to improve the company’s tuition reimbursement program. This report will make known the expectations that employees have when they attain their degree through the company’s tuition reimbursement program as a means of employee retention. This report includes, both, primary and secondary research. The primary research was completed via an online anonymous survey to employees within different departments and different positions.
All employees are aware of the company’s tuition reimbursement program; however, all employees have not utilized the program. Although the program is used as a way to attract new employees, the program has not been successful in keeping employees once they have completed their degree. It may be impossible to provide all employees with the option of advancing within the company, but there are ways to make employees feel as though their efforts are recognized and appreciated.
I am very pleased by the support that my colleagues have shown by taking the time to complete the survey. Hopefully, it will result in benefits to everybody. I appreciate your support in allowing me to research this particular issue and have been very open to what my findings are. I hope this report will provide useful information to you in improving the program.
Please feel free to contact me via e-mail or telephone if you have any questions or comments. If you need additional feedback from employees, I would be more than happy to assist in collecting that information.
Executive Summary
Purpose and method of this report
The company provides a tuition reimbursement program in order to attract employees; however, we have not been able to retain employees once they complete their degree through the program. The purpose of this report is to:
· Improve the program in a manner that will help retain employees
· Determine what benefits are most important to employees when they receive their degree through the tuition reimbursement program.
I created a survey through Survey Monkey and sent the link to 20 employees. The survey was used to determine if they believe there are advancement opportunities available and if they know anybody whom has resigned due to the lack of advancement opportunities available. Because every employee may not utilize the tuition reimbursement program, it was important to determine if they know of any employees who resigned because a former employee may have confided in them.
Findings and conclusions
All employees are aware that the company has a tuition reimbursement program; however, most have not utilized the program. There are some employees who know employees who resigned because they had a better opportunity outside of the company once they completed their degree. Overall, most of the respondents’ expectations are a promotion or a raise once they complete their degree due to their increased education and marketability.
As a result, the company should find ways to retain employees through the improvement of the tuition reimbursement program.
Recommendations for improving the tuition reimbursement program
My recommendations for improving the tuition reimbursement program are:
· Determining what an employee’s long-term goals are within the company when they participate in the tuition reimbursement program
· Restructuring the department, if possible and necessary
· Offering a raise to the employee or a bonus for completing their degree and insure that the employee is aware of any future plans the supervisor may have for them, if a restructure is not possible or necessary.
Table of Contents
Contents
1. Introduction ……………………………………………………………………………….4
1.1 B. F. Saul Company Tuition Reimbursement Program ………………………………4
1.2 Purpose of this study ………………………………………………………………….5
1.3 Scope of this study ……………………………………………………………………5
1.4 Sources and Methods …………………………………………………………………6
2. Conclusions ……………………………………………………………………………….6
3. Recommendations ………………………………………………………………………...8
4. Findings and discussion …………………………………………………………………..8
4.1 Benefits of Tuition Programs for Employers …………………………………………8
4.2 Benefits of Tuition Program for Employees ………………………………………….9
4.3 Costs of Tuition Programs for Employers …………………………………………..10
5. Implementation of Recommendations …………………………………………………..10
References………………………………………………………………………………..11
Appendix A ……………………………………………………………………………...12
1. Introduction
Tuition reimbursement programs are becoming more common as college tuition costs continue to rise and more companies are requiring some type of degree or certification in order to get promotions, even though some employees have a long tenure at their current jobs. According to EdAssist’s Annual Review of Employer Tuition Assistance Programs, over 60% of companies offer some sort of tuition assistance or reimbursement (Mulhere, 2016). Although there are a lot of companies that offer tuition programs, “on average, [only] 5% of employees participate in company tuition assistance programs” (Mulhere, 2016, para. 12). Tuition reimbursement programs have been used as a fringe benefit in order to attract and retain the best candidates and employees. While employees seem to receive the largest benefit because they are saving money on tuition costs in the long run, employers receive benefits through less costs due to turnover rates because they will have to recruit and train the new employees. There have been multiple studies regarding the effects of offering a tuition reimbursement program and they typically point to two schools of thought: the human capital theory and the unfolding model of turnover.
1.1 B. F. Saul Company Tuition Reimbursement Program
At B. F. Saul Company, once an employee has retained employment with the company for one year, they qualify for the tuition reimbursement program. When you turn in your tuition reimbursement form to the Human Resources department, you must sign a promise/contract that you will remain employed by the company for one year or you will have to pay the company back for the amount of your reimbursements for the past year. The company will reimburse you for tuition and book expenses once you have completed your class and have received a grade and proof of payment for the expenses that you have incurred. If you receive an A or B in your class, you will receive 100% tuition reimbursement up to $5,000 in any calendar year. If you receive a C in your class, you will only receive 75%. If your grades are lower than a C, the company will not reimburse you for your expenses.
1.2 Purpose of this study
The purpose of this study is to retain current employees once they have finished their degree programs through the program and to determine which benefits are most important to them. If the employee’s ultimate goal was to use this job as a stepping stone to find a better opportunity with another company, the company will not be able to keep them no matter what; however, if the employee has tenure with the company and desires to advance within the company, the company has the opportunity to retain them.
1.3 Scope of this study
This study investigates:
· Are employees aware of the tuition reimbursement program?
· Have these employees utilized the tuition reimbursement program?
· Are there advancement opportunities available to employees who attain their degree?
· Are they aware of any former employees who have left because they were unable to advance once they attained their degree?
· What benefits are most important to employees once they attain their degree?
The survey was distributed to a small number of employees. Therefore, the study is not indicative of the entire company; however, it allows us to take the results from this original sample and modify or expand certain points before sending it to a larger population of employees.
1.4 Sources and Methods
The primary research that was completed was based on a survey (see Appendix A) that was distributed via Survey Monkey to 20 employees. Using Survey Monkey as the distribution method allowed the employees’ responses to remain anonymous. The anonymity provides for more honest results because they will not be reprimanded for their thoughts. The secondary research was obtained through multiple scholarly journals and articles. The results were regarding benefits of tuition reimbursement or assistance programs.
2. Conclusions
Based on the findings from the survey of various B. F. Saul Company employees, the following conclusions were made.
· All employees are aware that the company has a tuition reimbursement program.
· Almost half of these employees have utilized the tuition reimbursement program.
· Only three of these employees have attained their degree through the company’s tuition reimbursement program.
· None of the employees felt as though there were advancement opportunities once they completed their degree.
· Half of the employees know of a former employee that resigned after they attained their degree.
· There were multiple reasons why the employees resigned
· No advancement opportunities
· No raise
· Found a job that utilized their experience and education
· Other reasons
· A promotion and/or raise is important to all employees if they attained their degree through the company’s tuition reimbursement program.
3. Recommendations
The secondary research that was conducted maintained that employees that have the intention of staying with the company will stay if they feel that their position is commensurate with their schooling. After reviewing the results, the following recommendations may be found useful.
· Create a directory of available advanced degrees offered by local colleges or universities and align them with positions within the company in order for an employee to advance or be promoted with one of these degrees
· Determine what an employee’s long-term goals are within the company when they participate in the tuition reimbursement program
· Restructure the department, if possible and necessary
· If a restructure is not possible or necessary, offer a raise to the employee or a bonus for completing their degree and insure that the employee is aware of any future plans the supervisor may have for them.
4. Findings and discussion
The concept of tuition reimbursement can be broken into benefits and costs. The benefits are not solely for employees, but for employers as well. As such, employers need to consider what their goals are in regards to offering a tuition reimbursement program. If companies are willing to attract candidates with a tuition reimbursement program, why not do something to keep them?
4.1 Benefits of Tuition Programs for Employers
The assumption is that if you invest in your employees through a tuition assistance or reimbursement program, your company will have less turnover. In addition, having a tuition program increases the company’s employability because they are more attractive to prospective employees. According to Lee and Maurer (1997), “[Knowledge workers] do not add value to the firm because of their labor per se; they do not add value to the firm because their work histories per se; but they do add value to the firm because of what they know” (p. 248). Although you are gaining “knowledge workers” by contributing to their development, it is just as important to promote these workers once they earn their degree (Benson, Finegold, & Mohrman, 2004). “The unfolding model also specifies that fit (perceived compatibility) between employee jobs play a role in turnover” (Benson et al., p. 325). According to Benson et al. (2004), their “study shows that tuition reimbursement has an overall positive effect on employee retention” (p. 327). This positive effect may simply be due to the fact that it takes a relatively long amount of time for a person to complete a degree while going to school part-time. As long as they want to take advantage of the tuition program, they will need to remain employed, which means that employee retention will be higher for a period of time. According to Marcus (2016), “Lowering the price to employers even further is the fact that many companies also now require their employees to apply for federal financial aid before the education benefits kick in, meaning taxpayers are helping underwrite these corporate efforts. And the portion that the companies do supply is largely tax-deductible” (para. 10). In addition to the tax deductions, employees are improving their professional skills and are more motivated to work hard (Heitzman, 2015). When employees are motivated, they are less likely to look for new employment.
4.2 Benefits of Tuition Program for Employees
Tuition rates are steadily increasing, which “suggests that working while in school is an important source of funds to pay for higher education and that employer funding can be particularly beneficial for students” (Faulk, Srinivasan, & Bingham, 2009, p. 166). According to Buddin and Kapur (2005), “From the worker’s perspective, employer-sponsored education has several potential benefits, including better promotion and earnings opportunities within the firm, and a higher probability of finding a better job in another firm” (p. 341). If employees do not feel as though they will be able to utilize the new skillsets that they acquired from obtaining a degree, they do have the option to take their skills and education somewhere else. Research has “shown that the wage effects of education are more closely tied to completing a degree than to simply staying in school” (Benson et al., 2004, p. 317). Therefore, tuition programs give employees the opportunity to increase their earning potential.
4.3 Costs of Tuition Programs for Employers
The main cost associated with a tuition program for employers is the actual amount expended by the company. In addition, employees may become overwhelmed and cut back on their productivity at work because they need to dedicate time to schoolwork (Heitzman, 2015). “While educational opportunities may increase worker productivity and morale, these opportunities may also increase the possibility that workers leave the firm for better jobs” (Buddin & Kapur, 2005, p. 342). Once an employee obtains a degree, they are more marketable in the job market and are no longer concerned with a tuition benefit, so it may be more beneficial for them to find new jobs (Benson et al., 2004, p. 317).
5. Implementation of Recommendations
The recommendations may prove difficult to implement at first, but it will open the lines of communication between employees and their supervisors or even the Human Resources department. These lines of communication will help establish relationships, which may not have been present before. Once these relationships are established, employee retention may be higher regardless of the advancement opportunities available.
References
Benson, G. S., Finegold, D., & Mohrman, S. A. (2004). You Paid For The Skills, Now Keep Them: Tuition Reimbursement And Voluntary Turnover. Academy Of Management Journal, 47(3), 315-331. doi: 10.2307/20159584
Buddin, R., & Kapur, K. (2005). The Effect of Employer-Sponsored Education on Job Mobility: Evidence from the U.S. Navy. Industrial Relations, 44(2), 341-363. doi:10.1111/j.0019-8676.2005.00387.x
Faulk, D., Srinivasan, A. K., & Bingham, J. (2012). Sources of Funding and Academic Performance in Economics Principles Courses. Journal Of Economic Education, 43(2), 165-181. doi:10.1080/00220485.2012.659645
Heitzman, A. (2015, September 29). Employer Tuition Assistance: The Pros & Cons. Retrieved from https://www.inc.com/adam-heitzman/employer-tuition-assistance-the-pros-amp-cons.html
Lee, T. W. & Maurer, S. D. (1997). The Retention of Knowledge Workers with the Unfolding Model of Voluntary Turnover. Human Resource Management Review, 7(3), 247-275. https://doi.org/10.1016/S1053-4822(97)90008-5
Marcus, J. (2016, June 07). The Reason Employers Help Workers Pay for College. Retrieved from http://time.com/money/4353997/employers-helping-workers-pay-college-tuition/
Mulhere, K. (2016, April 25). How Much Employers Benefit from Tuition Assistance Programs. Retrieved from http://time.com/money/4305549/paying-their-workers-college-tuition-can-pay-off-for-companies/
Appendix A
1) Are you aware that the company has a tuition reimbursement program?
a. Yes
b. No
2) Have you utilized the company’s tuition reimbursement program?
a. Yes
b. No
3) If yes, did you attain your degree while using the tuition reimbursement program?
a. Yes
b. No
4) If yes, did you feel that there were advancement opportunities once your degree was completed?
a. Yes
b. No
5) Do you know of an employee that resigned after they attained their degree?
a. Yes
b. No
6) If yes, do you know why they resigned?
a. No advancement opportunities
b. No raise
c. Found a job that utilized their experience and education
d. Other
7) If you were to attain your degree through the company’s tuition reimbursement program, what would be most important to you?
a. Promotion
b. Raise
Discussion Question:
Step 1: Choose a classmate's research report and post a response telling him/her that you are reading his/her report - only 1 reader for each report, please;
Step 2: (Here's the hard part - and where Chap. 17 helps). In a memo (check Week 1's topic on standard business writing types for correct memo format), tell the person whose report you have read that the company/community/etc. WILL NOT be implementing the recommended solution to the problem he/she has proposed. You will have to be creative in offering reasons why the solution cannot be implemented (money, opposition from stock holders, higher command or management, etc., are typical reasons for such decisions). Here is a helpful explanation of how to handle such a memo:
Post your memo as your second response to the person you have chosen.
This exercise gives you practice in one of business/professional writing's toughest tasks - saying no.
Remember, try to follow the advice that you gain from Chap. 17 in the textbook. This will make the task both a little more difficult (the actual writing task) but somewhat easier (the handling of having to say no.)
For advice and resources to help you write a successful bad news memo, see the resources in Content for Week 7.
Doing this should give you all the knowledge you need to give your classmate bad news. :-)
Please watch the short video linked to in Content for Week 8, “Video review of executive summary for WA#4.”
This is the link to the video https://learn.umuc.edu/d2l/le/content/324894/viewContent/13277071/View
T
Then answer the following questions.
1. What is proportional length? In writing your report, did you find it challenging to keep your executive summary to proportional length? If so, what challenges did you encounter? Your answers can be a short paragraph for each question.
2. To whom was your report addressed? Is this person or group of people likely to read your whole report? Or just the executive summary? Please explain your answer.Your answers can be a short paragraph for each question.
3. What was your methodology in your report? You can review the video to re-visit how the methodology could be integrated into an executive summary.
Percentage of Employees that Attained their Degree through the Tuition Reimbursement Program Yes No 3 2
Reasons Why Employees Resigned No Advancement Opportunities No Raise Found a Job that Utilized their Experience and Education Other 2 1 4 1
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