How Tuition Reimbursement Can Help Recession-Proof Your Organization


July 17, 2023
8 min read

Employers have embraced tuition reimbursement programs as a way to attract and retain highly qualified team members, and as a solution to skills gaps and talent succession issues. In a tight labor market, offering the benefit of tuition reimbursement can set an employer apart from others in a crowded field and attract higher quality job candidates. It can also help employers recession-proof their organizations by developing teams that are as resilient as they are talented.


This discussion will analyze the benefit of tuition reimbursement programs and how they can contribute to a powerful blueprint for success in challenging economic times. 

Enhance Employee Skills and Knowledge

To remain profitable and competitive, organizations need to evolve and be agile enough to adapt to changing market conditions and challenging economic times. During economic downturns, employers may have to consolidate teams or reduce their size, potentially exposing or widening skills gaps that threaten productivity, workflow and profitability. By investing in upskilling and learning pathways that help employees evolve with the organization, this exposure can be minimized.

The benefits of tuition assistance programs make them an actionable solution for talent acquisition and retention, and employee engagement, and an attractive alternative to costly and complex learning and development (L&D) programs. When you consider that the cost associated with hiring and training someone who is new to the company can be 6 times more than building from within, the cost-efficiency of training and promoting existing employees becomes clear.

Employers can take up to $5,250 per employee, per year, as a tax deduction. Matching employees’ annual tuition reimbursement or assistance to that figure means the benefit becomes cost-neutral to the employer. Employees participating in tuition reimbursement programs share this tax break. They don’t have to declare the reimbursement on their taxes, up to that amount, as long as the company has a written policy and meets federal guidelines.

In a series of studies with leading employers, the Lumina Foundation examined the differences in promotion, transfer, retention and absenteeism rates for employees who did and did not participate in tuition assistance programs. The studies found that tuition assistance consistently results in a strong return on investment, with all of the study participants, including Cigna, Discover Financial Services and Advocate Health Care, achieving a positive ROI.

Increase Employee Loyalty and Engagement

Employees may be more likely to stay with a company that supports their career development. The Lumina Foundation’s ROI studies revealed that turnover decreased among employees who participated in tuition assistance programs. For example, at Advocate Healthcare, employees participating in the company’s education assistance program were up to 3% more likely to be retained than employees who did not participate. For Cigna, the results were more substantial. Program participants there were 8% more likely to be retained than their peers.

The study also found that employees who participate in tuition assistance programs also climb the corporate ladder at a higher rate. At Discover, for example, workers who availed themselves of tuition assistance were 21% more likely to be promoted.

Even during challenging economic times, employers have to consider factors that affect employee engagement, satisfaction and participation. The support of a robust tuition assistance program could make the difference between employees who feel uncertain and those who are motivated, involved and feel a sense of belonging because their employer has created a culture of learning and growth. This increased satisfaction can result in reduced employee turnover. As detailed in the DeVryWorks 2023 Talent Outlook Study, 72% of respondents (employers) indicated that professional development is part of the reason they’re able to retain their top talent.

A study of more than 22,000 participants in tuition assistance programs found that employees who use such educational assistance programs say they feel loyal to their employer and more satisfied in their jobs. 8 in 10 say tuition benefits make them more likely to stay with their employer, regardless of any policy that may require them to stay, and nearly 6 in 10 say they were offered a promotion, new opportunities within the organization or other professional benefits within 2 years of completing their education program.

Boost Recruiting Efforts and Retain Top Talent

It should be no surprise that large retailers, manufacturers and other employers are providing educational benefits to attract and retain workers in a competitive talent market. Job candidates are looking for rewarding opportunities and upward mobility. Existing employees know that by gaining their first college degree or obtaining non-degree certifications they could significantly improve their internal promotability.

Employee retention is one of the 4 learning and development focus areas for 2023 and a major concern for 93% of organizations, as highlighted in LinkedIn’s 2023 Workplace Learning Report.

In the aftermath of the pandemic, many organizations wrestled with an unprecedented level of employee turnover, and they continue to struggle with skills shortages. Organizations concerned with employee retention should be using tuition assistance programs as a way to keep the workforce they have and provide learning pathways for them to move up in the organization. 

Build a Pipeline of Future Leaders

HR teams and their departments are typically focused on the benefits, onboarding and training challenges of today. A talent succession plan looks at the leadership needs you’ll likely have in the future and the learning pathways to support those needs.

Talent succession may not be a top-of-mind concern for all employers, but leadership complacency can result in a less-engaged team and a leadership gap in an economic downturn that could come in the not-too-distant future. A talent succession plan that is supported by a buttoned-down tuition reimbursement program can help you to be more confident that you’ll have the right leaders in place 5 years, or even 10 years, from now. 

Foster Organizational Agility and Innovation

Employees who’ve adopted a mindset of lifelong learning may bring fresh perspectives and new ideas that, when put to work, enable the organization to remain competitive and adapt to changing market conditions. This may be particularly important during times of economic uncertainty.

When employees pursue college degrees, employers benefit. Through complex coursework, employees who pursue college degrees are likely to acquire or sharpen analytical skills, which can make them better decision-makers. In the same way, they are likely to have better problem-solving and critical thinking skills, and to refine the communication and teamwork skills that help them to collaborate better with others.

Can a Tuition Benefits Program Prepare Your Workforce for an Uncertain Future? DeVryWorks Can Help You Find Out.

By building a tuition benefits program to help you solve current and predicted talent gaps and that is aligned with your talent succession planning, DeVryWorks can help you acquire, elevate, train and retain the diverse and productive workforce you need to succeed, even in challenging economic times. Our learning pathway consultants can help transform your challenges and objectives into actionable, hands-on learning programs that solve current skills gaps in IT and cyber security, accounting and finance, operations and supply chain management and other in-demand areas.

Related Content