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Corporate Tuition Assistance Programs Are a Common “Black Hole” of Talent Spending, According to Bersin & Associates Research

Estimated $16.5B Spent, But Few Companies Align Tuition Programs with Corporate Talent Strategies

Oakland, CA – February 5, 2009 -- While 85% of companies today have some kind of tuition assistance program, most companies do not centrally manage their programs or align them with corporate talent needs. The dollars involved are significant. The average expenditure for participating employees in such programs is $3,769 per employee, almost three times what is spent per employee on traditional corporate training.

More than 400 companies across all industry segments participated in a recent Bersin & Associates research initiative on tuition assistance programs. This research, which also included in-depth interviews from representative corporate executives, focused on identifying spending patterns and best practices in tuition reimbursement strategies.

“Most tuition assistance programs are institutional and considered to be a standard employee benefit,” said Chris Howard, principal analyst at Bersin & Associates. “Consequently, most companies do not capitalize on the potential to use these dollars to support specific talent management objectives. In fact, 27% of the companies we surveyed do not measure program effectiveness in any way.”

Tuition assistance programs came into practice in the 1950s and 1960s, based on the success of the GI Bill. Soon, they became viewed as a standard employee benefit, much like healthcare. While most companies have general guidelines for the types of classes and degrees covered, programs are generally administered from a transactional, not a strategic, perspective. “We were startled to find that such huge sums of money are allocated to corporate benefits with little or no measurement of impact or effectiveness,” said Josh Bersin, president. “While the intangible, personal value of higher education is clearly very high, we see a tremendous opportunity for companies to more effectively align and manage these dollars toward strategic talent needs.”

Research findings have just been published in the research report, Tuition Assistance Programs: Best Practices for Maximizing a Key Talent Investment. The report covers these and other topics:

  • The impact of tuition assistance programs on employee retention.
  • Factors that influence employee participation.
  • The value of strategic partnerships and alliances with educational institutions.
  • Key metrics for gauging effectiveness and business impact.

The report includes nine best practices for increasing the effectiveness of tuition assistance programs, along with detailed examples from organizations such as Verizon, ACI Worldwide, The Boeing Company, and the Spokane Teachers’ Credit Union.

The research report is available at no cost to Bersin & Associates research members. Non-members can purchase the report for $495. For more information, including a table of contents and complimentary executive summary, click here.

Chris Howard will also discuss findings at Bersin & Associates’ upcoming research conference, IMPACT 2009: The Business of Talent®, April 14-16, in St. Petersburg, FL. For details, click here.

About Bersin & Associates

Bersin & Associates is the only research and advisory firm focused solely on research in enterprise learning and talent management. The company’s WhatWorks® research and research-based services are designed to deliver actionable and practical guidance and to improve operational effectiveness and business impact.

Bersin & Associates research members gain access to a comprehensive library of best practices, case studies, benchmarks, and in-depth market analyses designed to assist professionals in making fast and confident decisions. Research areas include planning and strategy, learning programs and delivery, talent management, technology and infrastructure, and measurement and analytics. Member benefits include strategic advisory services, briefings, forums, analyst interaction, and workshops.

Bersin & Associates is the host of the industry’s only annual research conference on enterprise learning and talent management. IMPACT 2009: The Business of Talent®, will be held April 14-16, 2009, in St Petersburg, Florida.

For more information, go to www.bersin.com or call 561 455 0622, extension 223.