On paper, traditional tuition assistance programs (TAPs) – such as tuition reimbursement – appear to deliver a win-win situation. Adult employee learners can easily pursue their education while continuing to work full- or part-time. At the same time, organizations are able to provide a meaningful benefit to their people, enabling them to continue learning and growing their skills, deepening their loyalty to the company and reducing their likelihood of attrition.
However, what appears to be a logical business decision in theory often doesn’t result in value for these learners or their employers.
U.S. companies spend nearly $180 billion every year on formal training and talent development, of which $28 billion is invested in TAPs. Yet employee uptake remains at a mere 1-2 percent. Furthermore, the programs are not strategic, rarely have proven outcomes and are difficult for workers to use, especially since employees typically shoulder tuition costs upfront and then go through complicated processes to obtain reimbursement months later.
This approach to learning and development (L&D) is outdated, underutilized and unproductive. In this post, we dive into five common pitfalls of traditional TAPs and measures you can take to steer clear of them with a modern approach.
5 common pitfalls of traditional tuition assistance programs
1. Difficult to measure and show ROI
Many corporate HR and learning departments don’t have mechanisms in place to assess the effectiveness of their TAPs. That means executives typically have no visibility into outcomes, including students’ degree progress, completion rates or employee retention.
“Companies can typically spend $50 million or more on tuition assistance or reimbursement, but if you ask them how many people graduated, what schools they went to or if their people have actually progressed, they have no idea,” said Jonathan Lau, InStride Co-Founder and Chief Operating Officer. “They are basically administering the program with no measurable return on that investment.”
To avoid this pitfall, there are several crucial components to consider that make up a more modern approach to workforce education. First, it’s critical to strategically align the program’s objectives with greater business goals. This means understanding your company’s top business priorities (such as upskilling, retention, engagement, etc.) and then designing an education program around those needs.
An example of this in action is Carvana’s Keeping Education in Your Sight (KEYS) program. Aligning with company goals to promote upskilling and retention, the KEYS program tackles supply and demand for the specific jobs the company needs to fill. At inspection centers, for instance, there was an increasing demand for technical roles. The new program enables Carvana to directly address this demand.
Next, it’s imperative to know the right metrics to track such as talent mobility, turnover and distribution, plus cost to hire, time to hire, onboarding costs and more. The other key component is a flexible technology platform that makes it simple for administrators to manage and measure the program’s performance through robust reporting capabilities.
With these key elements in place, you can track your program’s performance and are able to demonstrate to the C-suite and other stakeholders how a workforce education initiative drives measurable business value.
Read more: It shouldn't be challenging to measure the return on your L&D programs. Use this easy-to-follow framework to learn how to prove a clear ROI on a workforce education program.
Many traditional TAPs are built without accessibility in mind. For example, tuition reimbursement programs typically require upfront payment from the employee. This can be a major financial burden that deters employees from participating.
Plus, there are typically many administrative burdens for employees and employers. In a recent InStride survey, employee respondents cited filling out applications, completing financial aid forms and locating transcripts as the most difficult barriers to overcome.
As a result of these challenges, only about 25% of interested employees ever start an application to take advantage of a TAP benefit.
Workers leave the chance for a better future and income on the table simply because their employers have made it too difficult, too frustrating or too confusing for them to access it. In addition, accessibility in talent development is crucial to providing equitable opportunities for all of your promotable employees.
Traditional TAPs require considerable time and effort from employees, company HR managers and academic administrators. In contrast, a modern strategy provides options that take into consideration the most difficult barriers to overcome as well as the various backgrounds of a diverse workforce.
For instance, implementing a program with a direct-billing model has employers pay for the tuition expenses upfront, rather than reimbursing employees later. This ensures that the financial burden is taken off the employee, making education more accessible.
For learners pursuing advanced degrees, to frontline workers who are in need of high school completion, it's possible to develop a program that meets the requirements of every learner — no matter their previous academic background.
The desire for employee education clearly exists, but so does a lack of awareness about how to find and pay for it. In the InStride survey cited earlier, 80% of employee respondents said they were interested in going to school while working, but only 40% knew their employer offered a TAP or reimbursement program. Companies implement these costly programs but do little to promote them effectively and encourage participation.
Companies also tend to bury their education opportunities within a laundry list of other benefits, making it difficult for employees to find the information they need, enroll in the programs or seek internal help.
Lau added, “Unfortunately, learners are often left on their own to figure out which school to go to or which program to register for, and information and rankings about schools and programs are also hard to find.”
Before employees can take advantage of development opportunities, they have to know about them. This requires building and executing a communications strategy and campaigns for both onboarding and on an ongoing basis to drive awareness.
The objective is to effectively market workforce education programs to employees, ensuring they understand how the education offerings will benefit them and drive career advancements. Also consider leveraging multiple marketing channels including email, webinars, social media, learner testimonials, FAQs, posters, mailers and more.
4. Missing tangible outcomes or clear path to success
Today, many employees are interested in going to school while working yet are not ready to commit unless they know it's going to be worth their time and effort. Although numerous traditional TAPs are available, they are often challenging to navigate, not relevant to employees' needs and level of education, and don’t align applicable skills and competencies in a learning environment that makes sense for one specific organization.
Research shows that employees need to see tangible career outcomes and clear-end goals that justify the time investment that education requires. Leaders should consider taking an approach that supports an appetite and acumen for lifelong learning, and to provide workforce education programs that address educational needs for learners at all levels of an organization. This way, employees have clear insight into their career trajectory and the education required to get them to their desired destination.
That said, it’s key to offer flexible, inclusive education paths that support acceleration of an academic journey and drive real outcomes. When building defined education paths consider the following:
- No one-size-fits-all: Consider many of the nuances for various learners and provide a curated mix of relevant offerings such as short skills courses, industry-relevant certificates and certifications that support professional development.
- Quality education: Partner with top-tier academic institutions that offer flexible, inclusive education paths which can include for-credit options, stackable credentials and diverse modalities for learning to address immediate needs and also merge into degree programs later on.
- Company objectives: Align appropriate and relevant learning options that support the core skills and competencies outlined in high-demand, target roles.
5. Lack of ongoing leadership support for learners
Upskilling employees to meet current and future needs is critical to a company’s long-term success. InStride research shows that while business leaders understand the value of education, they don’t always understand the value of their involvement to drive results forward. They often place career discovery work on their employees and will only support where they believe they can add value.
Business leaders who continuously support the value of learning will not only cement the importance of your workforce initiative, but also promote the adoption by your employees.
With greater acts of support from the C-level for workforce education, more employees are likely to learn about the program offerings. Case in point is Desert Financial Credit Union. The company president and CEO’s strong support had a direct impact on engagement and adoption rates, with almost one-third of eligible employees submitting interest and nearly 10 percent enrolling in the workforce education program within the first 90 days!.
Support from all levels of an organization is key. Managers within an organization are shown to be the most influential sources of information for an employee, especially when discussing career advancement, encouraging program completion and staying motivated.
Workforce education today and winners of tomorrow
So there you have it, the common pitfalls of traditional workforce programs that many corporations have inadvertently fallen into, where in the end, neither employees nor employers are realizing the actual benefits. But there’s a way to steer clear of them and ultimately drive better outcomes.
It’s time for corporate leaders to rethink their approach to workforce education.
With our modern and research-driven approach, InStride is leading a movement that unlocks the full potential of employee education. InStride’s strategic workforce education solutions have already provided tens of thousands of employees with access to credentials from top universities while helping them avoid $350+ million in student debt and driving business impact.
Ready to make education and lifelong learning a possibility for your workforce? Connect with us today.