Tuition Reimbursement as a Corporate Investment Strategy

Introduction: The Case for Tuition Reimbursement

To the Human Resource Department of Company X:

Practical Reasons: Corporate Self-Interest

In today's economically challenging times, it can be tempting for a company to engage in penny-pinching. Seemingly extraneous expenses such as tuition reimbursement are often the first "luxuries" to be eliminated from the budget. But far from being luxuries, tuition reimbursement and other forms of employee education should be viewed as necessities. Tuition reimbursement is an investment in the company's future, not simply the individual employee's future. For reasons of practical corporate self-interest, to improve the psychological and social atmosphere of the company, and to attract top talent, tuition reimbursement and support for other adult education in the workforce should remain critical components of an attractive benefits package.

First and foremost, from a self-interested perspective, offering tuition reimbursement for an MBA or a business or technical degree gives workers enhanced skills to serve the company. Employees will have additional knowledge in how to manage people and to cope with changes in technology. The benefits for the company outweigh the costs. For example, at Best Buy, when the company was experiencing worker attrition and high rates of burnout, two innovative MBAs in the human resource department who had studied motivation decided to institute what became known as a Results Only Work Environment (ROWE). Instead of hours logged at company offices, workers were judged by their results or output alone. They could work from home, come in early, leave early, or take time off to attend their children's soccer games, so long as they got their work done. Morale increased as a result of the willingness of these MBAs to think outside the box (Smashing the Clock, 2006, Business Week). By offering tuition reimbursement, the company encourages workers to seek out greater educational opportunities and to create innovative and profitable solutions for the organization.

As technology is constantly changing, enhancing worker capabilities can greatly benefit the company from a financial perspective. Even for workers who do not wish to return to formal schooling, adult learning can help them realize their potential. At Google, widely considered one of the most innovative companies in the world, engineers are allowed to pursue their own projects in the hope that their independent, self-directed learning will produce additional revenue-generating innovations. Many of Google's most successful applications have sprung from this program (Culture, 2011, Google Corporation).

Improving the Atmosphere at the Company

A final practical point in favor of corporate self-interest in providing employee education is that instituting a massive retraining of workers can be costly and difficult. Regular, small educational sessions to enhance worker skills save time and money in the long run, as the company does not have to be shut down for retraining. Workers with a strong educational background are also more flexible and open to change — and change is the lifeblood of modern organizations. Tuition reimbursement and other lifelong learning programs in the workplace "encourage employees to continue their education, expand their knowledge base and develop new skills. The companies then benefit with a better equipped workforce" (Krumrie, 2008).

Tuition reimbursement and adult education initiatives can generate profound goodwill in the workplace. Workers are more willing to remain at a company if they feel it gives back to them rather than simply extracting their labor, and tuition reimbursement encourages workers to invest in themselves. This also creates a more positive and upbeat attitude in the workplace. Even non-career educational efforts such as Google's fitness classes create a better mood among employees. After a yoga session, a Google employee returns to his or her desk better able to improve creative output. Additionally, adult education classes that enhance mood and physical well-being can save money on employee sick days and healthcare expenses. Employees with better attitudes about themselves — attitudes enhanced by lifelong learning — are less likely to feel stressed or psychologically overwhelmed, even when the workload is high.

Conclusion

More motivated and qualified workers are often attracted to companies that offer tuition reimbursement. As one source notes, "These programs effectively give pay raises to what is likely to be the most valuable group of employees… Employees who are considering advancing their careers will be more likely to choose to be employed by an employer which offers a tuition reimbursement program because the program allows the student to take their classes for free or at a significantly reduced rate" (Krumrie, 2008).

The sluggish economy means that employers must make a greater effort to attract, retain, and educate workers who can do higher-quality work more efficiently and at a lower cost. To attract top talent, the company must acknowledge that larger competitors are already offering this benefit. The most enterprising workers will gravitate toward companies like Google and others that offer continuing education if Company X does not. Workers at every level can benefit from this program, both young and old. "Tuition reimbursement programs can benefit young workers trying to complete a degree, and they can benefit experienced workers looking to learn new skills" (Krumrie, 2008).

Despite the uncertain economy, now is not the time to be "penny wise but pound foolish." Workers must understand that Company X wishes to invest in its future by investing in their future. Workers who are adding to their skill sets are happier, more productive, and more creative employees, regardless of their position within the organization. A higher level of education and expertise is needed in every facet of the company, from the IT staff to the marketing department. Everyone benefits from tuition reimbursement and workplace education programs: employees, employers, and customers alike.

Culture. (2011). Google Corporation: Corporate. Retrieved May 1, 2011, from http://www.google.com/corporate/culture.html

Krumrie, M. (2008, March 11). Take advantage of tuition reimbursement. Star Tribune. Retrieved May 1, 2011, from

Smashing the clock. (2006). Business Week. Retrieved May 1, 2011, from