Employers have long known the value of a well-educated workforce, but up until more recently the costs of higher education has been traditionally on the shoulders of employees. A study published by the Lumina Foundation that analyzed the Cigna Corporation’s educational reimbursement program reveals the unique opportunity and the strong return on investment that companies can have when they choose to invest in the educational pursuits of employees.
Conducted by Accenture, the global consulting services provider, and published in April 2016, the study looked at the behaviors and outcomes of 2,200 Cigna employees who had used the ERP benefits with those who had not – over a three year period. In that time span, the employees who were reimbursed for their educations were more likely to be promoted, retained, or transferred to advanced positions within the company.
Additionally, there were multiple financial benefits to Cigna. For every dollar spent on tuition, the company generated $1.29 in cost savings for retention and talent management. Cigna decided to up their tuition allowances based on this 129% ROI, with generous reimbursement of up to $5,250 for undergraduate degrees and certificate programs and $8,000 to $12,000 for graduate degrees in high demand careers.
Many employers require college degree holding candidates and those with specialized skills in order to remain competitive, but according to the Society for Human Resources Management only 60% of organizations even offer some type of tuition reimbursement. It’s not enough, given that the US public educational system fails to adequately prepare young adults to enter the workforce and there are talent shortages expected.
The Cigna study should encourage more employers to make an investment in the education and training of employees, connecting learning with career performance. Companies should also find ways to measure the ROI of these efforts, since it was mentioned that only 2 out of 5 companies actually do so now. Understanding the unique benefits of tuition reimbursement for their career goals can be part of the effort of companies to greatly expand the use of ERPs so that many more employees participate – increasing ROI dramatically.