Tuition reimbursement aids employers, employees

Many area employers in the area offer tuition reimbursement programs, including Springfield Remanufacturing Corp. and the city of Springfield.

Student employees

Travis Morrison, human resources director at SRC Heavy Duty, said tuition reimbursement programs are a positive for employer and employee. “We have a culture that is difficult (if you) come in off the street with no experience inside our organization. The return on the investment, if that person goes through the tuition reimbursement and becomes the supervisor, manager, facility manager or anything, that is a huge savings for us because that’s an internal person that we were able to bring up from an entry-level position or wherever they started, and we don’t have to train them in the day-to-day stuff.”

Morrison earned a master’s degree in business administration at Webster University through SRC’s tuition reimbursement program.

“My main goal was to learn about the total aspect of the business,” he said. “I don’t plan on leaving the HR field, but it gives me a total sense of the business. I probably wouldn’t have been able to do that without the tuition reimbursement program.”

Many workers, Morrison said, miss the opportunity of joining a company and getting a degree at the same time. “High school students are pushed so hard to go to college rather than maybe take a job and get college tuition reimbursement,” he said. “Why leave college with a big $20,000 bill when you can have it pretty much paid for in maybe six or eight years?”

Laura Ward, director of Webster University’s Springfield campus, appreciates the “real-world application aspect” SRC utilizes with student employees. “The students learn in school and they can take it back to work and apply it,” she said. “The business model that SRC has fits with people taking responsibility for the workplace and using ideas and being innovative.”

About 75 percent of students currently enrolled at Webster University’s Springfield campus are reimbursed by their employers, she said. Webster University is accredited by North Central Association Commission on Accreditation and School Improvement.

Both SRC and the city of Springfield require students to attend accredited colleges or universities. SRC employees are reimbursed 100 percent after successfully completing coursework directly related to their current job or a job that relates to a specific career goal within the company. Such goals are discussed with interested employees. “We want to know where people want to go in the next one year to three years to five years,” Morrison said.

City of Springfield employees, full- or part-time, may be reimbursed up to $3,500 annually for their education. Courses do not have to be job-related.

“They can use it for undergrad classes, graduate classes, or even continuing ed at OTC, like photography or something like that,” said Melanie Roy, human resources specialist for the city of Springfield.

Keeping tabs

Although tuition reimbursement programs benefit both employer and employee, statistics on employer return on investment are rarely tracked.

“Honestly it’s very hard to measure, because the skills that someone gains in a graduate program, no matter what it is, are helpful in different ways,” Ward said. “They may not come up with an idea that makes $1 million, but if you have them as a manager over the course of 10 years or they serve the city over the course of 10 years, they get so many rewards back from that education because they become leaders, and they have the skills necessary to work within a team.”

Nationwide, only 10 percent of eligible employees take advantage of such programs, according to Faith Ivery, president of Educational Advisory Services Inc., a Scottsdale, Ariz.-based firm that manages tuition plans for employers nationwide. There are ways companies can grow program use, Ivery said. “The basic questions that no company asks about their tuition aid are, ‘Why do we have it?’ and ‘What do we want it to do for us?’ If they don’t have answers to those and know it in a very detailed manner, they’re not getting the power out of this very significant benefit plan.”

The fear of investing money in an employee’s education only to see that employee move on isn’t a concern for some human resource specialists.

Roy said the city of Springfield doesn’t see tremendous turnover once employees graduate, “but I’m sure it’s a vehicle for some people.”

“Sometimes their goals do change, but for the most part, a lot of our alumni get promoted within the company they work for,” Ward added. “Their knowledge and their skills become more valuable.”

Employees today, Ivery said, are transient. “It’s not that they’re exploiting this benefit plan then leaving the company. That’s the responsibility of the company,” she said, adding that a company’s actions toward student learners can encourage employees to stay.

“(Companies) should know what each person is studying, so if somebody’s in accounting and says, ‘We’ve got this special project and too many people here are busy. Let me look in this pool and Mary Smith over in the HR department is majoring in accounting. Maybe I can pull her over for this project,’” Ivery said. “They can really exploit their employees, and the employees want them to. Employees say, ‘I want to be challenged, I’m studying this. Use me. I’ve got a new skill here. I’m really impassioned about my new area of study.’”

Return on investment

Roy said the city of Springfield doesn’t keep track of how many employees use the benefit to earn a degree. “Some max it and some might use just $50,” she said, adding that last year the city spent $145,000 of its general fund on the program.

A lack of statistics on employee tuition reimbursement is a problem nationwide, said Ivery. Most companies reduce it to a clerical function, writing checks to reimburse employees at the end of each semester. Rather than putting tuition reimbursement programs in the benefits category as something to be administered, Ivery recommends treating the programs as strategic plans to be managed.

“When I talk to benefits administration people about value of the return on investment, what are you doing to keep the costs down, how does this link with supporting diversity and minority advancement in your company, are you getting college credit for your training classes, they act like I’m speaking Martian or something,” she said.

Tightening the belt

Some employers might not offer tuition reimbursement programs due to financial restrictions, whether real or perceived.

“Sometimes it simply comes down to the fact that the money isn’t there,” Ward said.

Often, it’s possible for employers to help with employees’ educations even if they thought it was out of the question.

“We try to educate (employers), if they’re interested, in how they can do that without actually putting forward the money. Sometimes they can reimburse and have the employee be responsible for a certain percentage, and there’s ways they can set it up so that it’s done through payroll deduction and it doesn’t come out of the employee’s check all at one time,” Ward said.