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									       Tuition Reimbursement:
From Employee Benefit to Strategic Asset

                 Marcia Dresner, Senior Research Analyst
                 Corporate University Xchange

                 John Zappa, Senior Vice-President, CAEL
                   Agenda


 About Corporate University Xchange
 About CAEL
 Why Offer Tuition Reimbursement
 The Corporate University Xchange Tuition
  Reimbursement Study
 Plan Design & Practices
 Changes
                Corporate University Xchange

   Corporate University Xchange (CorpU) is the leading provider of corporate
    university research, benchmarking, and advisory services for helping
    organizations transform corporate learning.

   Founded in 1997, the aim of CorpU research and services is to maximize
    corporate investments in training and development to deliver improved
    business results.

   The Corporate University Xchange Awards for Excellence and Innovation in
    Corporate Learning are the oldest, most prestigious of the award programs.

   Our Benchmarking Studies go beyond the numbers to determine how
    companies are developing people.

   Membership in CorpU includes:
     •   Unlimited analyst inquiries
     •   Webinars presented by practitioners
     •   Access to an extensive Research Collaboratory
     •   Networking with other members
     •   Benchmarking comparisons
               About CAEL


 Council for Adult and Experiential
  Learning
 A 501(c)3 non-profit organization with
  global reach and over 30 years of
  workforce experience
 Mission to create and manage learning
  strategies for working adults
      Tuition Assistance and CAEL


 Over 20 years experience defining and
  managing tuition assistance programs
 Broad base of established clients
  • CAEL served over 60,000 employees seeking
    tuition assistance from their employers
  • Over 700,000 adults are eligible for tuition
    assistance programs managed by CAEL
  • Processed $170 million in education funds
CAEL Services
        Why Offer Tuition Assistance


            Reason for providing   % of Employers
             educational benefit

     Employee retention                 70%

     Improve productivity               69%
     (job performance)

     Increase qualifications            61%
     to do new work


Source: CAEL 2004 Tuition Survey
                               Supply of Human Capital



                               Labor Force 25 – 44 years
       70000

                     58201                                                     58547
       60000                       56286          54625          54301

       50000
Employees




       40000

       30000


       20000

       10000

             0
                     2000           2004          2009           2014          2019

                                                   Year




            Source: U.S. Census Data, Creating Value with Human Capital Investment,
            Dr. Michael Echols, Bellevue University
              Poll Question #1


My company considers tuition assistance:

1. A check-box employee benefit
2. Part of the employee value proposition for
   recruiting and retention
3. A program that can support learning and
   development goals
4. An important component to support talent
   management initiatives
            The Tuition Reimbursement Study


 Released in August 2007
 180 Organizations surveyed, ranging in size from 100 employees to
  over 100,000.
                                         E mployee c ount




                                               ≥50,000
                                                 11%


                               20,000 - 49,999
                                    11%

                                                            0 - 4,999
                                                               53%
                              5,000 - 19,999
                                   25%




             Source: Corporate University Xchange Tuition Reimbursement Study 2007
                             Industries Represented


                                     Indus tries R epres ented
14%



12%                                                                     C ons truc tion, T rans portation,
                                                                        Mining
                                                                        E nerg y, Utilities ,
                                                                        T elec ommunic ation
10%                                                                     Arts , E ntertainment, R etail and R eal
                                                                        E s tate
                                                                        Manufac turing - Heavy

 8%                                                                     Manufac turing - Hig h T ec h

                                                                        Manufac turing - O ther

 6%                                                                     P rofes s ional, S c ientific , and
                                                                        T ec hnic al S ervic es
                                                                        E duc ational S ervic es

 4%                                                                     F inanc e

                                                                        G overnment

 2%                                                                     Healthc are and S oc ial As s is tanc e

                                                                        Ins uranc e

 0%


Source: Corporate University Xchange Tuition Reimbursement Study 2007
                         Plan Design - Ownership


 Tuition Reimbursement is primarily the responsibility
  of Human Resources Departments.
 In large companies (>50,000) and in the manufacturing
  industries, L&D takes a much larger role.




         Source: Corporate University Xchange Tuition Reimbursement Study 2007
                                 Plan Design – What


                     S ubjec ts elig ible for reimburs ement
60%




50%



                                                                        Any s ubjec t
40%

                                                                        Any that are part of a deg ree prog ram

                                                                        O nly thos e related to their c urrent job
30%                                                                     role
                                                                        O nly thos e related to their Individual
                                                                        Development P lan
                                                                        As part of a job-related c ertific ate
20%                                                                     prog ram
                                                                        O ther



10%




 0%


Source: Corporate University Xchange Tuition Reimbursement Study 2007
                                                            Individual
                                                             Course
Plan Design - Where




                                                            Certificate-
                                                               CEU
                                                            Ph.D.
                                                            MBA-EMBA
                                                            Master
                                                            Bachelor
                                                            Associate




                                                                         Source: CAEL
                                                    5

                                                        0
                      35

                           30

                                25

                                     20

                                          15

                                               10
                                     Percent
                Plan Design – Where



 Accreditation is key, with more than 70 percent of
  companies requiring that a college or university
  be accredited before they will pay.

 Some companies, like Intel, go farther and specify
  which accrediting bodies are acceptable.

 On-line colleges and universities are always
  acceptable at more than half of companies, and
  sometimes acceptable at another 47 percent.
        Plan Design -- Accreditation


 Accreditation is a quality assurance process, not a
  license to operate

 Three types
    Regional Accreditation (evaluates entire Institution)
    National Accreditation (single purpose – i.e. distance education)
    Professional Accreditation (specific program such as engineering
     or business school)

 Most employers accept Regional Accreditation as the
  gold standard for undergraduate degrees.

 For more information check out Council for Higher
  Education Accreditation (www.chea.org)
                Qualcomm – Choosing Schools


 Qualcomm’s tuition assistance program supports both business
  requirements and an employee career development philosophy.
 About 180 approved classroom-based schools are approved for
  reimbursement, approximately 40% of which are outside of the US. Six
  distance-only programs approved. Schools are added to the list upon
  request and when Qualcomm establishes new locations.
 Key criteria used for approving schools include:
    Is the school a not-for-profit institution? Is it accredited? What is its
     ongoing reputation for quality education/research?
    Is it near a Qualcomm office?
    Are faculty professional educators/researchers? Is 50 percent or more
     of faculty employed full-time?
    Are Qualcomm-business relevant subjects and degree programs
     offered?
    Is original research conducted by either the school or faculty?
                                   Plan Design – Dollars


 Companies are generous in the limits put on tuition reimbursement.
 77 percent of companies have the same limits regardless of job role
  (shown below).
 Those that don’t have the same limits for everyone generally have
  higher limits than those that do.

                    Degree Level                                 Average per Year Dollar Limit

     Non-degree Courses                                         $3200

     Bachelor’s Level Courses                                   $4200
     Master’s Level Courses                                     $4300
     Ph.D. Level Courses                                        $4000
     Source: Corporate University Xchange Tuition Reimbursement Study 2007
           Plan Design – Payment Terms and Timing



 Over 70 percent of companies pay following course completion with a
  grade of C or better.
 Only 25 percent pay upon registration and manager approval.




           Source: Corporate University Xchange Tuition Reimbursement Study 2007
          Plan Design – Payment Terms and Timing



 Two Relevant Models
   Traditional Reimbursement
   Prepayment/Voucher Option


 Why offer Prepayment Option?
     Attractive Incentive for front-line staff;
     Eliminates out of pocket expense
     Strategy for engaging new employees
     Increase program utilization 5%12%
           Plan Design – Service Agreements




Source: Corporate University Xchange Tuition Reimbursement Study 2007
               Practices - Participation Rates

 The overall average participation reported was 5.2 percent, with the
  largest number of companies reporting just 2.1-4 percent participation.
 When L&D is in charge of the program, that number goes up to 6.2
  percent.
 About 28 percent of respondents felt that participation was too low.




               Source: Corporate University Xchange Tuition Reimbursement Study 2007
                Poll Question #2

What is the primary method you use to increase
program participation?
   1. We do not encourage usage
   2. Managers are encouraged to discuss tuition
      assistance as part of the career development
      process
   3. The value of the program is promoted to
      employees (e.g. intranet, information provided
      during orientation, company newsletters, etc.)
   4. Employees are recognized and rewarded for using
      the program (e.g. awards, success stories are
      promoted, stock incentives, etc.)
                                Practices - Spending


 The overall averages for actual spend per year are $1600 for non-
  degree courses, $3400 for Bachelor’s level courses, and $4500 for
  both Master’s and Ph.D. level courses.
                            Average spend per participating employee

           70%

           60%

           50%

           40%                                                                         Non-degree
                                                                                       courses
                                                                                       Bachelor’s Level
           30%                                                                         Courses
                                                                                       Master’s Level
                                                                                       Courses
           20%                                                                         Ph.D. Level
                                                                                       Courses
           10%

            0%
                 $0-$1999 $2,000- $3000-     $4,000-     $5,000-   $7,000- $9,000 or
                          $2,999 $3999       $4999        $6,999   $8,999
                                                                            more

           Source: Corporate University Xchange Tuition Reimbursement Study 2007
                      Real Market Price of Tuition




Source: The Market Price of Tuition, CAEL and Bellevue University’s Human Capital Lab, November 2007
               Sample Case Study


Bachelor’s Degree in Business
 Approximately 120 -128 credits
 $323 per credit hour
 Employee is taking 20 credits per year
 Completes in 6 years
 Year 1 = $6460 plus fees and books

 Six year cost = $45,060
              Practices - Measurement



 Most companies justify the dollars spent for tuition
  reimbursement as part of an employee value
  proposition that attracts and retains employees.

 The most recent Eduventures study concluded
  that 45 percent of companies do some
  measurement around their programs.

 When the CorpU study asked a question about
  measuring the impact of the programs, a totally
  different picture emerged.
                               Practices - Measurement


                            C urrent s tate of meas urement of impac t
60%



50%

                                                                                    Meas ure the prog ram's impac t on our
                                                                                    rec ruiting ac tivities
40%
                                                                                    Meas ure the prog ram's impac t on
                                                                                    employee retention

30%
                                                                                    F ollow up with partic ipants to
                                                                                    determine how the prog ram has
                                                                                    impac ted their job performanc e
20%
                                                                                    F ollow up with manag ers to determine
                                                                                    how the prog ram has impac ted an
                                                                                    employee's job performanc e
10%
                                                                                    P rovide reg ular reports to s enior
                                                                                    manag ers to demons trate bus ines s
                                                                                    impac t of the prog rams
 0%
       Do this well    Do this now Not doing this   No plans to   Not applic able
           now          but needs  now but plan       do this
                      improvement        to


Source: Corporate University Xchange Tuition Reimbursement Study 2007
       Case Study: Verizon Wireless


   Nation’s most reliable wireless network
   Over 64 million wireless customers
   70,000 employees in 49 states
   Ranked #4 in Training Magazine’s Top 125
    companies for 2007
        LearningLINK Tuition Program


 Encourage and assist employees in achieving
  their educational and career development goals

 Build critical organizational competencies and
  knowledge

 Attract and retain the very best employees
           Measure Outcomes



 Recruitment

 Retention

 Career Mobility

 Job Performance
                       Recruitment


 36% of LearningLINK participants surveyed felt the
  tuition assistance program was a definite factor in their
  decision to accept employment at Verizon Wireless

 19% of LearningLINK participants surveyed felt the
  tuition assistance program was probably a factor in their
  employment decision

 42% of LearningLINK participants have been with the
  company 2 years or less

 19% have been with the company less than 1 year
                           Retention




                                          Add another graph to
                                          show termination rates




96% of LearningLINK participants surveyed said they intended to
stay with Verizon Wireless for at least two years after completion of
their degrees
                     Career Mobility



                   Job Transfers
     40%                                               35%
               26%                28%
     30%
     20%
     10%
      0%
           VZW Population   2006 LL Participants 2006 LL Graduates

Job transfers include promotions, lateral and developmental moves
             Job Performance


 4,510 managers of LL participants surveyed

 52% of respondents noticed a change in job
  performance and behaviors while employees
  were engaged in LearningLINK program

 71% reported improved performance on the job

 73% reported improved behaviors on the job
                       Changes Noted

                     Top 5 Reported Job Changes
Improved employee satisfaction
Improved decision making
Improved leadership / management skills
Improved job productivity
Improved computer skills


                 Top 5 Reported Behavioral Changes
Increased interest in personal career development
Increased interest in leadership roles within the team setting
Increased interest in internal training opportunities
Increased interest in additional work assignments / projects
Increased adaptability to change in the workplace
               Retention Value


Rehire cost based on VZW population     $44,158,850

Rehire cost based on LL population      $18,593,200


Turnover savings                        $25,565,650


 Based on 10,105 participants
 Average VZW turnover rate of 19%
 Average LearningLINK turnover rate of 8%
 Average FTE re-hire cost of $23,000
 Program expenses for 2006 were $23.5 million
           Caterpillar – Clear Goals, Measurement, and More




 Executive management is clear about the goal: To develop an internal
  talent pipeline with people prepared for new roles.
 The tuition assistance program (TAP) managers report to senior
  management exactly who is using the program, and what courses of
  study they are pursuing.
 Courses of study are linked to the employee’s development goals, not
  necessarily to current positions.
 Articles and success stories about the program appear in the internal
  company newsletter.
 Graduates are monitored to see if they are promoted and retained and
  are polled about their satisfaction with TAP.
             Poll Question #3


How likely is your organization to strengthen the
   alignment between L&D and the Tuition
   Assistance Program?

1. We’re already completely aligned
2. We’re planning changes in this direction in
   the coming year
3. We’re considering it as a long term strategy
4. Not at all likely
                          Practices – Integration with Development




Source: Corporate University Xchange Tuition Reimbursement Study 2007   Source: Corporate University Xchange Tuition Reimbursement Study 2007
       Practices – Integration with L&D


 Leverage Preferred Educational Provider Networks for
  Tuition Discounts

 Leverage In-House courses
    Review Courses of Study and Types of Degrees
    Certification Prep or Continuing Education Course
    ACE College Credit Recommendation Services

 Improve the Experience for Employees
    Integrate the tuition assistance website with in-house education
     options and featured education providers
    Encourage employees to consider in-house education options
    Promote information on Prior Learning Assessment
                                          Change is Coming


   The table shows that many organizations are comfortable enough to keep
    their plans as is.
   But there are more companies willing to increase the money allowed, and
    integrate tuition reimbursement with IDPs and L&D.
     Changes in the Coming Year

                                                                      Increase   Decrease    Add    N/A
     List of approved schools and/or courses                              12%         3%     9%    77%
     Dollar cap                                                           21%         6%     9%    65%
     Number of courses allowed                                             5%         2%     6%    87%
     Eligibility requirements                                             10%         2%     7%    81%
     Integration with Individual Development Plan                         16%         0%    26%    57%
     Integration of tuition reimbursement with L&D                        12%         0%    16%    72%
     Management of program to L&D from HR                                  4%         0%     6%    90%
     Manager approval process                                              7%         4%     4%    84%
     Status of online providers as part of the program                     9%         1%     7%    82%
     To an external vendor for administration                              2%         1%     5%    93%
     Source: Corporate University Xchange Tuition Reimbursement Study 2007
          Increase the Program’s Value


   Communicate About the Skills and Credentials That
    The Company Needs and Values (Internal
    communications, IDPs, internal job postings)
   Enlist the efforts of managers and corporate leaders
    to promote a learning culture
   Walk the talk by showcasing success stories and
    demonstrating the value of making the effort
   Make the Program a Strategic Asset



As the talent shortage intensifies, you have
the potential to reshape and reposition your
tuition program to support and grow talent.


           Don’t miss that opportunity!
    Questions & Comments


Any additional questions, contact us:

       mdresner@corpu.com

         jzappa@cael.org


      Or visit us on the Web at

          www.corpu.com

           www.cael.org

								
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