Employer tuition-reimbursement programs, a casualty of the Great Recession of 2008, are making a comeback. Companies are rediscovering that education incentives help keep workers on the job and make finding new employees easier.
“Companies really did slash and burn their professional development budgets,” Bruce Elliott, manager of compensation and benefits of the Society of Human Resource Management, said in an article for The Hechinger Report. “Now we’re starting to see things come back, but we’re seeing them come back in completely different ways.”
For instance, many new tuition-reimbursement programs limit workers to courses from specific for-profit providers that are, in turn, providing employers deep discounts for access to those employees. Some companies also require employees to apply for federal financial aid before its education benefit is applied.
“It’s not just a charitable thing,” said Jaime Fall, director of the UpSkill America initiative. “Companies that hire frontline workers know that if they don’t offer benefits that are competitive, they’re going to lose out on workers who want to go to college.”
Another reason for companies to offer education benefits is dissatisfaction with the work skills of recent college graduates. Just 11% of business leaders told a Gallup survey they strongly agreed that graduates were ready for work, even though 96% of higher-ed officials believe their institutions are very to somewhat effective in preparing students for jobs.
“This is a way for the for-profits to maintain relevance,” said Howard Lurie, analyst for the education consulting firm Eduventures. “They’re under the gun. It’s an enrollment-management solution for them.”