In the November/December 2013 issue of Training, we reported on the general practices of the 2013 Training Top 125 winners (plus an additional 26 organizations that were on the cusp of making the Top 125 list last year) regarding tuition reimbursement. But readers wondered whether the practices are consistent across all organizations or differ among industries.
They do differ. Here, we contrast the overall practices of the 2013 Training Top 125 applicants with applicants in the four industries most represented in this group: finance and banking, health and medical services, real estate and insurance, and technology. Applicants in just these four industries represent 47 percent of all applicants for the Top 125 honor. The other 53 percent of applicants represent 26 additional industries.
As a reminder, tuition reimbursement covers the costs associated with taking courses at accredited colleges and universities and similar institutions. Employees choose courses to take and managers approve those courses; upon meeting certain eligibility criteria, employers reimburse the costs of the courses to workers. Tuition reimbursement programs provide a source of funding for skills and career development, but the costs are usually outside of the control of the Training function.
(To view the article with all the charts, click HERE)
EMPLOYEE PARTICIPATION
Nearly all (96 percent) of applicants to the 2013 Training Top 125 program offer tuition reimbursement. Of those in the four industries covered by this additional analysis, only one in real estate and insurance and one in technology did not offer a program.
Among most Top 125 applicants, only a small percentage of employees participate in tuition reimbursement programs: The mean participation rate is 7.35 percent of employees, and the median is 3.75 percent. Participation by employees in the technology industry falls below the overall mean and median, at 5.4 percent and 2.67 percent, respectively.
Mean and median participation of employees in tuition reimbursement programs in the health and medical services industry are above overall means and medians for Top 125 applicants at 8.8 percent and 7 percent, respectively. Likewise, for mean and median participation among employees in the real estate and insurance industry, at 10.49 percent and 6 percent, respectively.
COURSES COVERED
Courses for which employees request reimbursement typically must meet certain requirements. One is that the program of study relate to the job of the employee, a requirement of most (79.5 percent) Top 125 applicants. The industry that differs most from this general trend is the finance and banking industry; nearly all (94.7 percent) of Top 125 applicants in this industry require that a course pertain to the job.
The second requirement is that the course must be in a program of study that is degree-seeking in nature. This is a requirement of many (60.3 percent) Top 125 applicants. Applicants in the finance and banking and health and medical services industries are even more likely to require this; those in the real estate and insurance and technology industries are less likely to do so.
The other conditions address the term of employment with the organization. Most Top 125 applicants (69.5 percent) require that employees complete a certain term of employment before they become eligible for tuition reimbursement. Applicants in the finance and banking (78.9 percent) and health and medical services (81.8 percent) industries are slightly more likely than the rest of the applicants to impose this requirement; those in the real estate and insurance (61.2 percent) and technology (58.3 percent) industries are slightly less likely to do so.
Similarly, half of the Top 125 applicants require that employees stay with the organization for a certain period of time after completing the course or risk having to repay some or all of the tuition that the organization reimbursed. Applicants in the health and medical services industries are more likely to require this (59.1 percent), while those in the other three industries are all less likely to require this (finance and banking: 42.1 percent; real estate and insurance: 27.8 percent; and technology: 41.3 percent).
TUITION REIMBURSEMENT COVERAGE
In addition to tuition, many (65.6 percent) Top 125 applicants cover materials and books. But policies vary widely among industries. Applicants in the technology industry are more likely than all Top 125 applicants to cover these expenses (83.3 percent). Applicants in the health and medical services (44.5 percent) and real estate and insurance (55.5 percent) industries are less likely to reimburse these additional expenses.
HOW DO ORGANIZATIONS REIMBURSE TUITION?
Most (79.5 percent) of the Top 125 applicants only reimburse tuition after employees complete their coursework. Only 14.6 percent seldom or never wait for the completion of coursework to reimburse expenses. In other words, most organizations put the “reimbursement” in tuition reimbursement. Applicants in the health and medical services (86.4 percent) and technology (83.3 percent) industries are slightly more likely than all Top 125 applicants to wait until completion of the course to reimburse expenses.
In some instances, however, organizations might prepay tuition. Some (32.4 percent) of Top 125 applicants do so. Applicants would do so, for example, if they offer both tuition reimbursement and work-study programs. Although employees in the tuition reimbursement program (open to all employees) only receive payment after completion of courses, those in the work-study programs (only open to employees approved by management) receive reimbursement in advance. Applicants in the technology industry are much less likely than those in other industries to prepay tuition (only 16.7 percent of applicants).
Some (30.5 percent) Top 125 applicants reimburse tuition on a sliding scale depending upon the grade received. That is, the organization might reimburse full tuition if the employee earns an A, 90 percent if the employee earns a B, and 80 percent if the employee earns a C. Applicants in the real estate and insurance industries are more likely than the Top 125 applicants to base reimbursement on the grade earned, while applicants in the health and medical services and technology industries are less likely to base the amount reimbursed on the grade earned. The survey did not ask whether applicants require that employees receive a passing grade to receive reimbursement.
MAXIMUM TUITION REIMBURSEMENT
Most (76 percent) Top 125 applicants impose a maximum on tuition reimbursement expenses. Of those imposing a maximum expenditure, the mean cap is $4,051, and the median is $3,500. Because employees in the U.S. need to pay taxes on reimbursements over $5,250, employers often limit the maximum to $5,000 or $5,250. Most of the industries analyzed in depth have similar guidelines on maximum expenditures, although noticeably more employers in the health and medical services industry impose a maximum reimbursement (92 percent). In terms of actual expenditures per employee, however, most employers do not spend anywhere near the maximum: a mean of just $717 and median of $1,736.
However, spending in each of the four industries explored exceeds both this mean and median. Applicants in the technology industry reimburse the most per participating employee, with a mean expenditure of $2,910 and median expenditure of $2,831. Applicants in the real estate and insurance industries reimburse the least of the four industries studied in-depth, with a mean expenditure of $1,095 and a median expenditure of $1,837 per participating employee.
IMPLICATIONS FOR EMPLOYERS
As this analysis suggests, tuition reimbursement practices vary somewhat across industries. Consider tuition reimbursement programs in the finance and banking industry. The programs are slightly more restrictive than the typical Top 125 applicant in terms of what they cover and more likely to require that courses apply to a degree. Tuition reimbursement benefits are less likely to be available to employees on day one of their employment, but those employees are less likely to be expected to work for the organization for a period of time after completing a course. And expenditures per participating employee will exceed those of a typical Top 125 applicant.
In contrast, participation in tuition reimbursement programs typically is lower than average in the technology industry. Employees who do participate are more likely to have access to the benefit on day one of their employment and less likely to have to continue working for the employer for a period of time after completing the course. Employers in the technology industry also reimburse nearly four times the mean per participating employee as a typical Top 125 applicant.
For employers trying to assess their current or proposed tuition reimbursement programs, the general findings across all Top 125 applicants provide a representative snapshot of employer practices as a whole. But this additional analysis suggests policies and practices vary somewhat among specific industries.
Saul Carliner, Ph.D., CTDP, is the Research director of Lakewood Media Group LLC and an associate professor and Provost Fellow for E-Learning at Concordia University in Montreal. He is the author of several books on training, including the best-selling “Overview of Online Learning” and “Training Design Basics.” Contact: saulcarliner@hotmail.com.
Michelle Savard has more than 20 years of experience with managing, designing, and implementing multi-year learning strategies, needs assessment, and evaluation. She recently started her doctoral studies in education at Concordia University in Montreal.
