InStride named a 2023 Most Innovative Company by Fast Company
March 9, 2023


4 min read

Employer-sponsored education: A win-win for businesses and employees

blog header image for employer education assistance article

In this post:

Supporting your employees means more than just giving them a paycheck. As skills gaps widen and traditional education becomes more expensive and inaccessible, companies that have educational assistance programs are becoming sought-after by top talent.

When executed correctly, an employer-sponsored education program can be a powerful tool that helps you build a workforce that’s skilled, agile and ready to take on the future. Let’s break down the most common types of education programs, their benefits and challenges, as well as how you can modernize your approach to employee education for the greatest impact.


What is employer-provided education assistance?

Employer-provided education refers to any type of program that helps employees alleviate the financial costs associated with education.

A traditional education path has individuals completing the majority of their learning before entering the workforce. Colleges, trade schools, certification providers and other types of academic institutions exist separately from employers, but the intention is that they prepare students for the working world. 

On the other hand, an employer-provided education assistance program denotes a learning experience that’s provided and arranged by an organization to individuals who are already a part of their workforce. These types of programs may source a curriculum from external academic institutions such as a university or certifying body, but the learning itself is sponsored as an employee benefit. 


Types of employer-provided education programs

Types of employer-sponsored education programs

The most prominent examples of traditional sponsored education programs include:


Tuition reimbursement

In a tuition reimbursement program, a company will reimburse employees for tuition expenses that they acquire during their employment. Typically, these programs require the employee to meet certain eligibility requirements, such as being employed for a set amount of time, before they’re able to take advantage of the benefit.


Loan repayment

A loan repayment program consists of a company helping employees to repay student loans that they acquired prior to their employment. The company might pay the loan service directly or contribute money to the individual as taxable income.


Scholarship programs

A scholarship program is one where a company awards financial support to employees to go towards their education. Sometimes, these scholarships might be extended to employees’ families or dependents.


CTA banner for tuition assistance whitepaper


Benefits of employer-provided education

The benefits of education assistance programs

From boosting retention to enhancing your employer brand, there’s a variety of long-term business benefits that make employer-sponsored education a worthwhile investment. Before we dive into each one, it’s worth noting that not all education programs are created equal. There are countless factors related to the design of your program that can impact your desired outcome. 


Improves employee retention

Simply put, investing in education and learning showcases to your employees that their professional development is a priority. When they take part in these programs, they tend to be more engaged and are more likely to stay with the company longer as a result.

Research shows that learning opportunities are one of the strongest drivers of engagement and some employees would even consider switching jobs for a company that offers better access to them. 

Additionally, when employees are continuously learning, they’re able to take the new knowledge and apply it on the job, leading to better performance and potentially the opportunity to get promoted or move into a new role in the long term. Enabling internal career mobility is another factor that can positively influence retention.

For programs such as loan repayment that are more focused on financial incentives rather than skills development, employees may feel motivated to stick around to continue getting access to the benefit. 


Lower hiring costs and build your internal talent pipeline

Higher rates of engagement and retention also allow businesses to mitigate problems associated with workforce attrition. Less employee turnover means a significant reduction in the costs associated with replacing employees and backfilling vacant roles. 

Employer-sponsored education programs that are focused on skills development can also help you to develop high-potential employees and build an internal talent pipeline for critical roles within the business. While it may depend on the specific position, developing employees from within is known to be more cost-effective than hiring externally. 


Attract prospective job candidates

Today’s top talent craves growth. Access to learning and educational opportunities are consistently ranked as one of the top things that job-seekers are looking for in a prospective employer. In one study, 70% of employees acknowledged that they would leave their current company if offered better access to learning and development opportunities with another organization.


As the global talent shortage persists, the competition for high-performing employees is only growing stronger. Providing access to education assistance can be an enticing addition to your employer value proposition and help your business stand out to job-seekers.


Challenges of employer-provided education

The challenges of traditional educational assistance programs

The three types of employer-assisted education programs outlined earlier are the most common ones typically leveraged by organizations. However, these traditional approaches to employee education are quickly becoming outdated and ineffective at meeting the needs of modern businesses. 

Common challenges include:


  • Accessibility: Traditional employer-sponsored education programs are largely inaccessible to the workers who need them the most. 

    For example, tuition reimbursement programs require that the individual pays for tuition in advance and then wait for reimbursement which can take weeks or months. This payment model favors those who are in better financial circumstances while alienating others who aren’t able to put down a large sum of money upfront.


  • Complicated enrollment processes: Many traditional education programs come with rigid eligibility requirements and complicated enrollment processes that are difficult to navigate without proper support. Between determining eligibility, figuring out how to enroll in the program and completing the required documentation, many individuals get lost in the red tape and decide to give up on taking advantage of the benefit altogether.


  • Lack of support: Without proper guidance and support, employees may enroll in education programs that aren’t relevant to their role or aligned to their career goals. Some might even lose interest altogether because navigating all of the different learning options becomes too overwhelming.


  • Benefit caps: It’s common for education benefits to be capped at a certain amount per employee. While this is certainly better than nothing, the numbers barely scratch the surface of the financial burden of modern tuition costs.


  • Difficult to measure ROI: Traditionally, employer-sponsored education programs have often been viewed as initiatives that merely check a box in a benefits booklet, not as a critical business strategy. Couple this with the fact that traditional programs are often lacking the proper technology to measure program performance, and determining the business impact of the initiative becomes nearly impossible.Not only does this inhibit HR administrators from being able to manage the program effectively, but it makes showing your leadership team a clear return on investment nearly impossible.


A modern approach to employer-provided education

A modern approach to employer-sponsored education

To mitigate the challenges associated with traditional education programs, consider a more modern solution: strategic workforce education.

At InStride, we’re championing a new approach to employer-sponsored education that supports both business objectives and employee needs through accessible, career-building education. 

What does this actually look like in practice? Let’s examine the essential components:


  • Learning tailored to business needs
    The objective is not always to offer all of the education programs possible. Instead, it’s to select learning options that are strategically tailored to your long-term business objectives and designed to address the most critical skills needs of your workforce and organization.


  • Accessibility comes first
    Education initiatives can only be impactful if your people can actually take advantage of them. Leave reimbursement behind and opt for a direct-bill model that takes the financial burden off the shoulders of the individual. This opens the door for access to education for the employee populations that often need it the most.


  • Support for learners at all stages
    Navigating different academic institutions and learning options can be a daunting task even for the most motivated individuals. InStride’s Personal Education Advisors are available to offer live, unbiased guidance and support to employees as they start their learning journeys.


  • Measurable and easy to manage
    As with any business strategy, it’s critical that you’re able to show your leadership team how an education initiative is impacting the bottom line. InStride’s flexible technology platform provides program administrators with access to real-time reporting and analytics that deliver insights on everything from employee engagement to spending and ROI.


With this approach, your organization is able to mitigate the common challenges of employee education, while reaping the benefits that enable your business and workforce to thrive today and in the future.

Curious to learn more about employer-sponsored education? Unlock this report to learn why employees want more than tuition assistance and how you can design a program that delivers on your desired business outcomes.