Recession-Proofing Your Tuition Reimbursement Benefits

Trim. Snip. Cut. Those are the sounds of the budget being reeled in and reassessed. As companies struggle to stay alive, concessions are being made left and right. And one of the benefits on the chopping block is tuition reimbursement.

When the Canadian Auto Workers (CAW) reached an agreement with Chrysler in late April, as part of the company's mandated restructuring process, tuition rebates were one of several employee benefits that were eliminated. Officials said that in the grand scheme of things, the employees backed the sacrifices. "CAW members supported their union right through this process ... That has allowed us to bargain the very best agreement possible, imposing the minimum possible sacrifice on our members and their families, despite the incredibly tough times," said CAW President Ken Lewenza.

If your company is looking for places to cut back, should tuition reimbursement be on your list, too? Some experts say that although employees do sometimes take advantage of it, it's likely to have little impact on the staff as a whole and a greater impact on the company. "[A benefits] survey I produced actually had education benefits (tuition reimbursement) as one of the listed items we had employees address.  Quite honestly, we found that few employees took advantage of the plan," says Linda Konstan of Sensible Human Resources Consulting.

If 10 percent of your 100 employees use the benefit of up to $3,000 a year, the company could realize a savings of $30,000. More employees = more savings.

But is eliminating the benefit the best move? Most HR experts say no, since the benefit to the company of an employee with fresh, updated knowledge is great. Konstan suggests that one option is to make the benefit available to more tenured employees, thereby cutting back on the number of people eligible (and thus having fewer to use it).

Others say that the best way for the company to get the maximum tuition bang for the buck is to set strict requirements for using the benefit – including how long one must remain with the company after using it.

"If you have an incredibly promising individual who lacks education, only gets 100 percent payment by getting all A’s and must commit seven years to the company after completing their degree program or else must reimburse the entire cost of the education, that would probably be worthwhile.  To have an open education policy is probably not," says Patricia Fragen, a consultant with Strategic Office Solutions.