July 24, 2011
Tuition Reimbursement Implementation Report
In today’s society, college graduates are in demand and doing well. It is extremely difficult for someone to find a job, let alone a career, these days without a college education. Most entry level positions that are being created by larger companies require at least a Bachelor’s degree in Business, Communications, or Education. I believe that we can help with this situation and take advantage of the benefits for our company at the same time. The only thing we need to ask ourselves is do we want to grow this company even more than it already is? If not, I will stop right here, but if we would like for this company to grow and prosper I will be glad to continue. Job openings are created one of two different ways. Either a company opens a new job or a pre-existing employee leaves the company. Wouldn’t it be nice to be able to fill these positions with someone with a higher education degree and someone whom is more probable to stick around and make a career out of their job? Offering tuition reimbursement would give our company an upper edge on the other guys. Employing college graduates means our company will be able to complete much more complicated tasks as well as our normal tasks. This will open newer positions for more students and expand our company by being able to handle a wider workload at one time. College degree holders also bring a different level of professionalism to our company, new business minds, fresh administration hands, and technological communication masters will only improve our inner workings and our company’s name. Tuition compensation services are implemented by today’s top industries and have proven to be an indispensable drafting instrument. Though agreeing to pay the tuitions for college programs that meet certain criteria, companies will push their employees to persistently increase their specialized abilities and intelligence. One thing that I would like for everyone to understand is the types of careers that most college graduates possess. Research shows that the average college graduate stays with the same company until retirement, because most college graduates are people with a tendency to be dedicated, hard working, and motivated and creating a tuition reimbursement program would only help these same people to become loyal as well. The average degree holder earns more money throughout their career than someone whom has not attended college. Also, they are less likely to become unemployed, and if they do become unemployed degree holders tend to be hired on by other companies faster than others whom do not have a degree. In the chart to the right, we can see that from 1991 to 2001 people with college degrees earned anywhere from five percent to ten percent and even over 200 percent more than people without degrees, depending upon the type of degree earned. By the end of the year in 2001 the average High School Diploma holder earned approximately $27,500 per year. However, at this same time employees who held a Bachelor’s Degree or higher earned an average of $60,000 per year, this would be an increase of over 200 percent. Not only does having a college degree earn a person more but also cuts down on unemployment. As demonstrated in the chart below, recent studies also reveal that the average unemployment percentage of men and women who obtained a high school diploma was 5.5 percent in the year 2003. While this number was only 3.3 percent with persons who have obtained a Bachelors degree and even less for individuals whom had obtained higher levels of education. As a whole, occupations that employ mostly college graduates are expected to gain new jobs faster than some other occupations. Between the years 2002 and 2012, occupations that employ nothing except college graduates are predicted to increase 22 percent in size; this would be significantly quicker than the projected growth for other occupations, which is 15 percent. Tuition reimbursement programs normally contain one of three components, according to Newman and Stein”a maximum reimbursement amount, an eligibility requirement, and a reimbursement policy based on academic performance. The first characteristic is affected by the tax-advantage status of these programs. Reimbursements from employer-provided programs are exempt from income taxation under Section 127 of the U.S. Internal Revenue Code. The maximum income exclusion for a single calendar year is $5,250, and reimbursements under this level are exempt from federal income tax, payroll tax, and state income tax. A 2002 survey of human resource professionals and managers at over 500 firms finds that 70 percent of firms offering a tuition reimbursement program cap annual reimbursement, and over half of these firms (57 percent) have maximums that exceed $4,000” (Newman and Stein 2003). The fact that companies set annual limits excess of tax exempt amount provides evidence that these programs are not solely offered because of their tax-advantaged status. However, the tax advantages are a great incentive. Tests were completed back in the year 2004 by a man named Cappelli that proved since involvement by those workers recruited after the Tuition Reimbursement plan was put into operation decreased their likelihood of leaving the company inside of five years by just about 50 percent. Another study, completed by The Spherion Company specifies that fewer than one half of employees in today’s society are content in the work they do. The run of the mill worker will stick with the same company for two to three years. On the other hand, people who accept reimbursement of their tuition will continue with that employer for five or more years. Isn’t this the type of employees we want on our team? Tuition reimbursement benefits are regard as one of the largely advantageous corporation programs. Our managers, office administrators, and salespeople will be further inclined to embrace an employer that offers such generosity. Offering reimbursement of tuition also demonstrates the employer has faith in a worker and their capacity to accomplish wonderful things. Self-confidence and increasing education can do miracles for both employee retention and office morale. This company is the best of the best, and we need to continue to supply ourselves with the best of the best.
Cornell University Law School. (2011). Title 26. Section 127. Educational Assistance Program. Retrieved from http://www.law.cornell.edu National Bureau of Economic Research. (2008, Oct.). The Effect of Tuition Reimbursement on Turnover. Retrieved from http://www.nber.org Occupational Outlook Quarterly. (2004, Winter). Job Outlook for College Graduates. Retrieved from http://bls.gov Recruit 2 Hire. (2008). Tuition Reimbursement=Employee Retention. Retrieved from http://recruit2hire.com University of Illinois. (2005). How College Affects Students. Retrieved from http://edocs.uis.edu