Is America already in recession, or is recession in the short-term future? Business leaders disagree on the answer. But one thing they can agree on is that tough economic times generally require finding ways to cut back. And often times cutbacks begin in in the arena of employee perks and benefits. Should tuition assistance be off limits this time around?
Whether you believe we are already in recession or not, tuition assistance might offer considerable value as an employee benefit. The question for employers is whether the value is enough to hang on while cutting other benefits. It is a tough question with no easy answer.
Different from Student Long Repayment
It should be noted that tuition assistance is not the same thing as student loan repayment benefits. As far as the former are concerned, a growing number of employers are looking to help employees pay off their student loans by contributing to a fund set up for that purpose. Tuition assistance has nothing to do with debt reduction.
Instead, tuition assistance is a benefit whereby employers help their employees cover the costs of continuing education. An employer might pick up the entire cost of earning so many credits per year. On the other hand, it may share the cost with employees based on a predetermined formula.
Regardless of how the benefit is implemented, the point is the same: to encourage continuing education and simultaneously increase employee loyalty. If things turn out well, the employer also ends up with an employee capable of contributing even more to the company.
One of Many Voluntary Benefits
Tuition assistance is just one on a long list of voluntary benefits employers are now considering. Brokers are responding in kind. According to BenefitMall, a general agency based in Dallas, brokers willing to combine traditional benefits with voluntary benefits earn significantly more revenue than those brokers electing to focus on health insurance only. So guess what brokers are doing?
They are looking at every voluntary benefit option they can find. They are putting together attractive packages they hope will sell. But during tough economic times, employers cannot afford to contribute to voluntary benefits as much as they would like. That takes us back to the tuition assistance question.
A tuition assistance benefit could be viewed as an investment in the company. Employees continuing their educations in order to acquire new knowledge and skills have something more to offer upon course completion. Some will have new certifications. Others will have acquired new practical skills. The list goes on and on.
Investing in tuition assistance is investing in the health of the company by helping employees improve themselves. The danger is that employees will utilize the benefit and eventually jump ship for greener pastures. Then the investment ends up helping a competitor.
Something Has to Give
The reality is that something has to give when the economy goes south. It is easy to cut out perks like free lunch and subsidized streaming services. Perks of this nature do little more than help employees feel better about their jobs. But when it comes to benefits that have a direct impact on a company’s financial performance, the decisions are not so easy.
If there were a way to evaluate the return on investment a tuition assistance benefit offered, it would be easier to decide whether to keep it during tough economic times. But there is no static evaluation method. That leaves employers having to rely on their own experience, common sense, and gut instincts. It is a gamble one way or the other.