5 common myths about education benefits
Education benefits have dramatically evolved over the last few years.
Now, the trends that have been driving these changes are only accelerating. Education benefits, mainly in the form of tuition assistance, have become an integral part of corporate strategy. The right benefits program can not only drive efforts around upskilling, retention and talent acquisition, but can also provide the key to economic mobility for the frontline workforce.
To unlock this potential, the function of an effective education benefits program needs to be properly understood. Let’s debunk the five most common myths.
1. Education benefits are primarily for corporate employees to get an MBA or advanced degree.
Historically, education benefits have been intended for corporate employees who already have a college degree. These benefits have been present but underutilized, and programs are typically designed to support workers who are looking to boost their career with an MBA or advanced degree.
This is no longer the most common use for an education benefits program. Now, the focus is on frontline workers who are looking to gain new skills or attain a college degree. For this group, it’s not just about a minor career boost—it’s about economic mobility.
Frontline workers have very different needs than corporate employees, and benefits programs should be designed for those differences. These employees are often juggling work, school, and family—so classes must be online and have flexible scheduling. This group also tends to have minimal or no college credit, and are often still paying off student loan debt from previous educational endeavors. That means they need support services in the form of coaching to help them thrive, as well the option to go back to school without incurring any debt.
2. Debt-free tuition assistance is too expensive to make broadly available.
In the U.S., there are more than 45 million borrowers who collectively owe about $1.5 trillion in student loan debt. College is expensive enough to have created a student debt crisis, so providing the opportunity for debt-free education for every employees may seem impossible at first.
However, there are a few important points to consider. The first is that the student debt crisis is exactly why an organization wouldn’t want to create an additional burden for employees. According to a survey of Guild students, 40% of working adults already have some existing student debt. The prospect of having to take on additional loans creates a barrier to entry that dissuades many employees from taking advantage of the program in the first place.
The second consideration is that education doesn’t actually have to break the bank. There are a number of high-quality, low-cost learning institutions across the U.S. that have demonstrated successful outcomes for working adult students. Business leaders can determine the quality of a school by looking at metrics such as loan default rates, retention and graduation rates, and career placement data.
3. Education benefits don’t have a high return on investment.
Tuition reimbursement has long lived in the realm of HR as a part of a total rewards package. Programs were meant to differentiate employer brand, but there often wasn’t much attention given to actually measuring the ROI of the program. As a result, many believe that ROI can’t be demonstrated at all.
This is simply not true. In recent years, education benefits have proven effective at driving strategic business objectives, such as upskilling, recruitment, and retention. As companies increasingly realize the value of education benefits, they’re starting to tie metrics to that value.
One employer that partners with Guild moved from a tuition reimbursement model to debt-free tuition assistance and has seen hugely positive outcomes, including:
- 2x higher adoption of tuition assistance than tuition reimbursement among frontline employees
- 26% higher re-enrollment in the second year of the program
- 41% lower spend per student with debt-free programs than TR
- 22% increase in retention vs employees not engaged in any education benefits
4. Education benefits are only for current employees.
This might seem counterintuitive. How could an education benefit be for anyone other than your employees? But recently, the concept of who a program is designed for has indeed begun to evolve.
Training and education can also be a benefit for furloughed or laid off workers. As businesses are forced to make difficult decisions regarding their workforce, they are also looking for ways to provide what support they can for these employees. One solution involves skills-based training and education to help displaced workers find new jobs. It often costs less than traditional outplacement services and can be much more effective.
Even before the COVID-19 pandemic, an estimated 88 million working adults were in need of upskilling or reskilling to compete in the future of work. Now is the time to offer training to help these employees get jobs that enable them to thrive in the long term.
5. Education benefits are designed primarily to close skills gaps within an organization.
This isn’t exactly a myth, as education benefits programs can and should help build skills needed internally with your existing workforce.
However, that’s not all they should be used for. As an extension of the above myth, education can provide a boost to give employees the skills they need to succeed in the future of work. A new education benefits program should start by aligning with corporate strategy, but it can also provide employees with skills they can use when they eventually leave the organization.
Building a program for frontline workers can also mean thinking about economic mobility. There are plenty of positions that are good for the short term, but aren’t enough to provide growth and stability for the long haul. The concept of outskilling, or skills-based training that helps an employee leave an organization, is gaining momentum. Many organizations know that even if workforce reductions aren’t immediately necessary, they very well could be in the future. That’s why it is imperative to both upskill current talent for internal mobility and position employees for future success.
Don’t buy into these myths. Get the most out of a program that works for your business.
Education benefits have certainly come a long way. Don’t miss out on your program’s potential because you’re stuck in the old way of thinking. What used to be a checkmark in the HR playbook is now the key to corporate strategy and economic mobility—and should be prioritized accordingly.