The cost to bring a new employee into your organization is significant. The Society for Human Resources Management (SHRM), in its 2017 Talent Acquisition Benchmarking Report, reports that the cost per hire was $4,425 in 2016, up from $4,219 in 2015. Many employees don’t stay long enough for the employer to see a return on its investment — the SHRM report says that more than a quarter of employee separations occurs during the first year of employment.
To justify the high expenses involved in recruiting, your company must commit to employee retention initiatives, such as tuition reimbursement. LinkedIn’s 2018 Workplace Learning Report found that 94 percent of employees would stay longer at their current companies if it invested in their careers. The report said identifying and addressing skills gaps are high on the list of priorities for both executives and talent developers.
Here are three things to know as you move forward with your organization’s corporate learning program.
You May Be Able to Measure ROI
When Lumina Foundation investigated the tuition benefits offered by Cigna, the health care giant, it discovered that the company saw a $1.29 return on investment for every $1 spent. Lumina concluded that “Tuition assistance is a powerful and profitable tool for businesses, leading to improved talent management outcomes and reduced and/or avoided costs,” and “tuition assistance and other higher education attainment programs can and should be viewed as strategic talent and employee engagement investments by businesses.”
It’s important to recognize that the results seen by Cigna might not be representative or indicative, as this topic has not been researched extensively. In fact, Lumina points out that fewer than 2.5% of all organizations actually measure ROI from tuition reimbursement programs.
Your Employees Expect It
No matter the industry or role, employees assume that their organizations will provide learning opportunities. “Development is no longer an optional perk or reserved for only certain positions. It’s expected by today’s talent,” writes Meghan M. Biro for Forbes. “It signals that the employer values their people and are actively interested in their success — not just on the job, but over the long haul.”
Harvard Business Review discovered that 44% of survey respondents said they valued tuition reimbursement. That figure is not as high as health, dental and vision insurance, but it outranks flashier perks such as gym memberships, free day care services, free snacks and on-site fitness centers.
You Need Manager Involvement
The LinkedIn report mentioned above says management is a “critical ingredient” in helping organizations reach their education goals. Managers have a strong influence — 56% of employees say they would take a course suggested by their managers — but talent developers say that manager involvement is a top challenge.
LinkedIn contributor Rachel Lefkowitz suggests some ways to encourage managers to take a larger role in employee development:
- Spotlight managers that promote learning
- Help managers locate courses that help employees fill skills gaps
- Make employee learning part of managers’ performance evaluations