Educational benefits help create the “knowledge employees” everyone wants

By Joyce Hampton
|Canadian HR Reporter|Last Updated: 09/04/2003


o you pay for educational courses your employees take? Everyone agrees it’s a good idea — it broadens minds, opens people to learning in general, increases creativity — but it’s a very expensive benefit to offer. Easy to talk about, difficult to get CEO approval for.

If that’s your bind, you’re in the same boat with many other HR practitioners, according to a new survey by the International Foundation of Employee Benefit Plans (IFEBP).

Generally it comes down to “is it work-related?” If it is, companies are more likely to provide money for the course or training. If it’s not, (while CEOs acknowledge there is value in learning in general) the funding is less likely to be available.

The IFEBP study,

The Many Faces of Educational Benefits,

presents a strong argument for why an organization may want to broaden its approach to funding educational benefits: employee retention. Everyone knows that an open educational policy is a great attraction tool when you’re trying to lure talent to your firm. But the study clearly indicates its usefulness as a retention tool.

“A high number of respondents — 88 per cent — agreed that it was an excellent retention tool,” said the study’s co-ordinator, Larry Aarhus, a research associate at IFEBP.

More than a hundred North American companies responded to the survey, which was conducted last January. Of 114 employers, 89 per cent had an educational benefit program.

“We also asked some opinion-based questions about who is responsible for paying for educational expenses,” said Aarhus. “A high percentage (68 per cent) said it was the employer’s responsibility to help employees with education.”

Companies should treat any education an employee takes, regardless of whether it is directly applicable to his job, as a good thing and should fund it, said Martin Harts, director of reward management for The Hay Group.

“Anything that broadens the mind or keeps the mind learning is going to prevent you from getting stale,” he said. “It’s where I think we should all be.”

He said that because work is becoming increasingly dependent on “knowledge,” any education an employee takes benefits the company.

“Anything that enhances the learning process and keeps that alive is going to benefit all concerned. The concept should be embraced by companies and rolled out to as many employees as you can possibly afford,” he said.

However, the study indicated that although most companies have educational benefits, only about 10 per cent of employees actually take advantage of them.

“The uptake is going to be very modest in relation to the population,” said Harts. “It’s a time issue. You see it all around you. People don’t have the time unless they’re young and single and have no children.”

Larry Aarhus agreed the low usage rate is likely due to the lack of spare time most employees have at the end of the day.

“It’s on your time,” he said. “You have to modify your home schedule and work-life commitments to go to school, so that’s probably why participation rates are so low.”

Offering educational benefits not directly linked to job functions is something universities have been taking advantage of for some time.

And not surprisingly, they are the exception to the low usage figure. For one thing, many people join a university specifically for the educational benefits because most schools will put your children through school either for free or for a drastically reduced fee.

Organizations won’t be able to offer educational benefits as cost effectively as universities, but educational institutions do provide an example of how doing so increases employee knowledge and improves retention.

As long as it’s a course offered by the university, employees at Saint Mary’s University in Halifax get a 50 per cent reduction in tuition, 100 per cent if the course is job-related.

It’s a benefit that costs the university more than $100,000 a year, but “it’s critical that, as a university, we do it. If we don’t practice what we preach, I don’t think it sends out the right message,” said the school’s benefits officer, Karen Reedman.

The university employs 575 faculty members and staff and the educational benefit is extended to family members, including children.

But not only does the program encourage employees to take courses they might not normally take, it “helps our employees to educate their families. You’re supporting the community you’re going to draw from eventually.”

While they are working at Saint Mary’s, more than 75 per cent of employees will take advantage of the educational benefit for themselves or for family members.

In spite of the fact that employees usually know about the benefit before they even come to work for the university, Reedman makes sure the benefit is communicated via several different media including brochures, posted information and during initiation.

According to the study, the more different media used to communicate benefits programs the better the uptake.

The study also showed that small employers, more than companies with more than 500 employees, believe they have an excellent educational benefit program.

“They’re probably keeping a better eye on it, they’re pushing the program,” says Aarhus. “If you have only 50 employees, you know everyone.”

The survey also indicated that manufacturing employers are more likely to offer educational benefits than service-industry employers.

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