Tuition assistance has become an important incentive that companies use to keep workers. The free or discounted higher education not only improves recruitment and retention of employees, but also cuts down on student debt, says experts.
Men with bachelor’s degrees can earn up to $900,000 higher than those who only graduated from high school. Meanwhile, women’s bachelor’s degrees earn $630,000 more, according to the Social Security Administration.
“It is an underrated benefit and probably underutilized benefit,” Willis Towers Watson senior director Lydia Jilek said.
Minority groups find it harder to afford education
For employers, education-as-a-benefit is a cost-effective strategy that adds “to the stickiness of the employee,” Jilek said. “If someone can get a bachelor’s degree for no cost, that is likely to increase their loyalty to their employer.”
Chipotle chief financial officer Jack Hartung told CNBC in April that employees who take advantage of the company’s free degrees are 3½ times more likely to stay with the company and seven times more likely to move up into management.
According to research by Bright Horizons less than half of the employees said they have been able to pursue educational goals in the last five years, mostly due to the time commitment and financial obstacles
Meanwhile, minority groups struggle more than others. For instance, 44% of Black employees said that they find it hard to afford education compared with 29% of white employees. The same applies to women since 36% of working women report financial hurdles in education compared to 22% of men.
“There are still the constraints that all working adults have: time, the financial commitment and having the confidence to go back to the classroom,” said Jill Buban, a workplace education expert and general manager of EdAssist, a division of Bright Horizon focused on workforce education.
EdAssist works with companies like Accenture, Bank of America and T-Mobile to develop up-skilling programs.
“These benefits can give that extra boost,” Buban said. “That can be a real game-changer.”
In addition, “with the increased opportunity for distance learning, people can enroll in a program online perhaps that they haven’t been able to do in the past,” Jilek said.