Continued education for your employees is vital to the success of your business. While this may seem opinionated, the is a lot of truth to it. Every day, technologies are updated, processes change, and the need to refine hard and soft skills increases.
If you want to see your business grow and thrive, you must be sure that the talent you hired stays at the top of their game. It is imperative that you have some form of an employee education program to educate your employees and build a more productive workforce.
Employee education programs can have a great impact on your business financially and culturally. However, that just skims the surface—these programs provide a long list of benefits. Let’s explore a few.
There are essentially two methods you can use to offer educational benefits to your employees and obtain tax-free treatment: a payment/reimbursement arrangement or an educational assistance program. In order for employees to receive tax-free treatment, the education must be work-related and qualify as one of the two tests below to prove so.
- The education is legally required in order for the employee to keep his or her present salary, status, or job.
- The education improves or maintains skills that are required in the employee’s present employment.
There is a way that employers can offer an employee education program tax-free regardless of whether the expenses are job-related. This is called an educational assistance program.
Educational assistance programs give employers the ability to provide their employees with assistance up to $5,250 annually, which is excluded from the employee’s income.
There is a common misconception that if you help employees further their education, they’ll take their new set of skills and leave your company. This is not necessarily true and has been contradicted in case studies.
An example of how employee education programs improve retention comes through a partnership with Fiat Chrysler Automobiles US (FCA) and Strayer University. Strayer offered the dealership’s employees and their families the opportunity to earn a degree free of charge. The outcome: participating dealers experienced nearly 40% higher employee retention and 17% higher revenue growth than nonparticipating dealers.
However, the concept of improving retention through educational assistance can be even simpler than that. By investing in an employee’s education, you’re making them feel valued.
A recent study shows that 94% of employees would stay at a company longer if they invested in their careers.
Identifying Future Leaders
Approximately 86% of organizations with a leadership development program respond rapidly to changing market conditions. Including educational benefits into a program like this helps to accelerate the development of future leaders.
While it may be enticing to begin your recruiting process by venturing outside of your company, promoting a current employee who is excited about improving their skills and learning more may be more cost-effective and impactful on your workplace culture.
Your employees already know a great deal about your business, so by giving them the opportunity to further their education, they’ll acquire new skills that they can apply to your business operations.
If you need more help with your recruiting efforts, you can always take advantage of a business owner’s guide to recruiting.
A common fear is that an employee’s studies will take their time and focus away from work. However, there are so many ways to offer an employee education program that includes options to fit someone’s schedule.
For example, if someone doesn’t have time to commit to a degree, you can offer to pay for seminars, webinars, or classes at local community colleges.
If you have employees who would love to get a degree but struggle with scheduling, you can offer to reimburse them for online courses. Many online programs give people the ability to learn at their own pace. This is especially beneficial for people that work full time.
It is admirable to offer employee education programs to those you employ. It is also important for you to set expectations and boundaries.
Popular conditions include completing course work with a passing grade, requiring a specific grade, and maintaining a continued-work agreement. This is when an employee agrees to work for your company for a period of time after completing their education. If you need help setting up an employee education program, consider working with a professional employer organization (PEO) like Vensure Employer Services. PEOs are masters of human resources and can provide a wide range of resources like evaluation templates, handbooks, and 401(k) guides.