Based on our 2015 Employment Value Proposition study, we know that the number one reason employees join or stay with a company is because of development opportunities. That can mean training and development, but who is to say that it doesn’t also include the chance to finish that degree or pick up a new one?

When we think about exciting topics in HCM, educational assistance might not be the first thing in mind. And yet it’s a benefit that the majority of companies offer and is seen as a valuable tool for attracting and retaining staff. Last week I had the chance to speak with someone seeking information about this topic, and we explored some of the wide variety of programs in the marketplace. While there are some commonalities across programs, there are also some factors that add to the attraction/retention factor in terms of employment value proposition.

Based on our 2015 EVP study, we know that the number one reason employees join or stay with a company is because of development opportunities. That can mean training and development, but who is to say that it doesn’t also include the chance to finish that degree or pick up a new one?

In this post we’re going to explore some of the programs that companies have in place and examine the all-important issue for any business initiative—ROI.

Program Design

The standard tuition assistance program offers employees a set amount of money to reimburse them for attending an accredited university. The program at Microsoft is a good example of this:

Microsoft employees can receive financial assistance for business-related tuition up to $5,250 for undergraduate and up to $10,000 per calendar year for graduate-level coursework. In addition, employees have access to qualified academic counselors to help think through career paths and connect to a network of schools offering tuition discounts to extend tuition dollars. For reimbursement, a minimum grade is required and is verified with a transcript at the time of reimbursement. The courses must be job-related per the manager’s decision, and this only covers tuition at accredited institutions.

Again, that’s fairly standard. But on the far other end of the spectrum we have companies like Amazon.

Amazon’s Career Choice Program covers 95% of tuition and books up to $3k per year. College and certifications are covered, but only for in-demand fields, regardless of whether skills are relevant at Amazon. For example, some of this year’s focus areas include nursing, IT, engineering, and accounting.

One thing about the Amazon program that stands out is the relatively low limit of reimbursement. To offset that, the company offers internal classes to keep costs low and flexible for employee attendance. There is also another side to the equation that might not be immediately obvious. By limiting the assistance to any one individual, the company can afford to spread the benefit to many more employees.

My research uncovered a few other household names that are worth mentioning:

  • Google employees can get up to $12,000 tuition reimbursement per year to further their education, as long as employees receive at least a “B” in their courses.
  • AT&T covers up to $5,250 annually for eligible full-time employees to help cover education costs that have been pre-approved. There is a maximum payout of $20,000 for undergraduate degrees and up to $25,000 for graduate degrees.
  • Home Depot will cover up to $5,000 annually for all salaried associates and $3,000 for full-time hourly associates who have been working at the company for at least a year to take courses related to the business. Employees must earn a grade of “C” or better and must attend an accredited college. Unlike many companies, part-time workers can also participate: this group is eligible for $1,000 in support.

What’s the ROI?

The area that is particularly interesting for me is the ROI discussion. For the most part, companies probably don’t track the impact of these programs on recruiting, retention, or performance. But they should.

The graphic below is from a report by the ROI Institute on the value of tuition assistance. As you’ll see, as companies progress up and to the right in terms of maturity, there is increased value for both employee and employer. Yes, it requires more effort than simply letting the program run on autopilot, but it also has the potential to improve talent development at a level that simply isn’t possible with a purely administrative approach.


Source: ROI Institute/EdLink

Just like any other talent process, looking at your educational assistance in the context of the broader organization is going to help you identify the value it can bring. I’d be curious to hear from some of you that have run these programs in your own organizations. Are you seeing the value? What are some of the characteristics of your program that differentiate you from the competition?

Ben Eubanks, HCM Analyst, Brandon Hall Group

Ben Eubanks

Ben Eubanks, SPHR, SHRM-SCP is an HR professional and industry influencer. His experience working as a leader in the human resources field has provided him with a broad range of experience encompassing smaller organizations, government contracting firms, and the nonprofit sector. He has hands-on experience with various HR disciplines, including recruiting, benefits, employee relations, and compensation.