Should Your Company Offer Tuition Reimbursement?

Tuition reimbursement is an educational benefit that many employees covet and praise. Such programs encourage workers to maintain a learning type mentality, help in developing candidates who are worthy of promotion in the future and help companies retain their best talent. However, before a company decides to offer tuition reimbursement, they should consider if it will actually help or hinder their business.

According to the National Center of Educational Statistics, the average employer contributes around $3,000 toward tuition. Tax law states that $5,250 can be contributed tax free up to 2010 for the benefit of employees. Thus tuition reimbursement reduces your business's tax liability while increasing the ability to retain and promote employees. A company should consider the following aspects of a tuition reimbursement program:

The Learning Mentality: It is a good idea to encourage scholarship in your business. People who are engaged in school are likely to learn new skills, develop new ideas and be more focused on their job. Encouraging education is like encouraging innovation. However, a problem might result if you need more routine work then you need innovative thinking (i.e. assembly worker). For example, if your company only requires simple routine tasks, tuition reimbursement for these jobs may not have the same benefit as it does for professional employees.

Promotional Opportunities: If your company desires to promote from within or you are in an industry where skills have to be homegrown, then it makes sense to offer tuition reimbursement. By encouraging people to become educated you have some basis of promoting people with experience to the next level; thereby retaining these people. However, if the average person works only one or two year's in your company, tuition reimbursement might be setting up the next employer to receive the benefits.