Promote Tuition Assistance to Close Skills Gap

shutterstock_56919706The looming skills gap has created a sense of urgency among businesses. A lack of qualified employees will equate to lower productivity, slower growth and development and low profitability. These conditions will affect the ability of businesses to compete at all levels from local to global and impact the economy.

Taking positive steps to help fill the skills gap gives business control over their future in terms of talent, growth and profitability. One way to take positive steps is to promote tuition assistance plans. For every dollar that businesses invest in their employees, there is a positive return. Higher achieving employees can eliminate skills gaps. Individuals with higher education levels contribute to the regional economies at a higher level. Higher wages and salaries result in higher tax contributions to local and state governments.

Tuition assistance programs often are an underutilized benefit at companies. The 2015 Educational Assistance Benefit Survey showed that 83 percent of the responding organizations offer educational assistance to their employees. Yet the numbers of employees using the programs are quite low.
• In 10.3% of businesses less than 1% use the benefit
• In 20.6% of businesses 1-2% of employees use their program
• In 22.3% of businesses 3-5% of employees use their program
• In 4.6 % of businesses 21-25% of employees use their program
• In 5.3% of businesses more than 25% of employees use their program
In addition to these utilization rates, 12.4% of businesses are not sure how many employees use their program.

There isn’t necessarily a causal relationship between company promotion of TAP and employee utilization, but there does seem to be a correlation. The majority of businesses don’t demonstrate an active interest, or place emphasis on tuition benefits. The benefit survey shows that 63-66 percent of organizations use employee handbooks, orientations or their organization website and intranet to promote tuition assistance. Employees receive information, but not necessarily encouragement to use the benefit. Another 4.3 percent of businesses have no communication about their program.

Employers can take several actions to promote tuition assistance plans to their employees.

First, define career paths for employees. The lack of qualified employees is a concern for businesses, yet more than half of employees say that their current job is an obstacle for continuing their education. When employers define career paths and show advancement opportunities, then current jobs become a step along the path. According to the Pearson report Sharpening their skills for the workplace, 43% of certificate students and 32% of degree seeking students hope to advance in their current job as a result of advancing their education.

Second, relate business goals and skills gaps to career paths and tuition assistance. Adult learners are an important component of filling skills gaps. There are not enough 18-21 year olds earning degrees and entering the marketplace to fill the demand for jobs. The nontraditional student, the adults who are in the workplace, will be key to filling these jobs. And these people are ready: 72 percent of adult workers in the Pearson report believe they will need additional education in the next five years, to keep up with advancements in their field. Sixty-eight percent of the employees are likely to enroll in a higher education program in the next five years. Helping employees who personally recognize the need to increase their education and relate this to clear business goals will help promote tuition assistance utilization.

Third, promote tuition assistance from the top down. Business leaders who are involved in promoting TAP programs and make education important will create a culture of learning. Including counseling to help employees find the most effective way to complete or further their educations will promote tuition assistance programs. The Pearson study shows that only 14 percent of adult students receive information from career counselor and an addition 14 percent receive information from their employer or human resources. Business leaders can build on defining career paths and relating business goals to career path by encouraging employees to further their education. Ideas and values that come from top leaders define a business culture. That is where a culture that values and promotes education begins.