In today’s business landscape, competition for qualified talent remains fierce. According to recent surveys, nearly 70% of U.S. employers are still facing talent shortages.
Coupled with the fact that over half of millennial and Gen Z employees are actively watching for new job opportunities, this could spell trouble for organizations with lofty goals and objectives.
As companies continue to encounter challenges filling roles and slashing high turnover rates, HR and business leaders are seeking concrete solutions. For many, adding education benefits to an employee compensation strategy may be the answer to attracting and retaining top talent.
Why Companies Are Considering Education Benefits
While they may seem an unlikely solution, education benefits have proven to bring significant benefits. High-performing job-seekers want to work for companies that invest in their long-term growth.
Recent data indicates that 87% of Gen Z graduates see learning and development benefits as important or essential when evaluating a job opportunity, signaling the power of these perks in increasing offer acceptance rates.
For current employees, education benefits can lead to increased feelings of satisfaction and lift overall morale. This, in turn, positively impacts company culture.
Still, it isn’t just the employees who benefit from education benefits. In addition to providing tax advantages, education benefits may also increase loyalty. According to Gallup data, nearly 70% cite employee compensation and benefits as a top reason why they were dissatisfied with their job or searching for something better.
Around 30% cited growth opportunities as their top reason, suggesting that offering education benefits that lead to advancement opportunities may decrease costly turnover rates. Additionally, these employee benefits can boost productivity and confidence and help you close skill gaps without the expense of hiring externally.
Should You Add Education Perks to Your Current Employee Benefits Strategy?
Before you consider incorporating education incentives into your employee compensation and benefits strategy, make sure to ask some critical questions.
What Strategic Gaps Are You Trying to Close?
Answering this question will help you determine the right solution and develop a solid strategy. For example, student loan repayment assistance may promote loyalty among employees who were considering leaving for better pay, while tuition assistance for new degrees may attract new talent looking to grow in their careers.
Companies with skill gaps that need immediate attention may consider certification programs, while those with longer-term goals can fund degrees that take years to earn.
Can You Create the Right Support Structures?
According to the U.S. Chamber of Commerce Foundation, 44% of employees have said that their organizations offer no additional resources to help them in their pursuit of education. Many feel that they do not have the time or bandwidth to acquire additional knowledge or skills.
Consider whether you’re willing to offer flexible schedules, coaching or mentoring, or even PTO for dedicated learning to help your team take advantage of the benefits you will offer.
How Will You Fit It Into Your Budget?
It’s important to meet with leadership and your finance team to understand how you will need to adjust your spending to make room for education benefits.
These conversations may include discussions about tax savings via Section 127 of the Internal Revenue Code or shifting resources away from external recruiting agencies to focus more on internal talent development.
Avoiding the Potential Pitfalls of Offering Education Benefits
Adding education benefits to your employee benefits strategy can be a significant undertaking. The following tips can help you do it well:
- Connect Learning to Business Needs: Review performance data and industry trends to identify skill gaps and pinpoint missing capabilities across the workforce
- Decide and Align Your Strategy: Contemplate which model (e.g., tuition assistance/reimbursement or loan repayment) best suits your employees’ needs
- Ensure Smooth Access for Employees: Simplify the application process, provide guidance where needed, and offer periodic reminders about benefits
Adhering to these best practices can help you avoid wasting resources and ensure your efforts are effective.
Fill Skills Gaps and Attract and Retain Top Talent With the Right Employee Benefits Strategy
Clearly, education benefits can be key in helping you reach your hiring and retention goals. They often have the added benefit of building a confident and engaged workforce with skills that give your organization the competitive edge.
If you’re looking to incorporate education perks that provide both employee-specific and company-wide advantages, we can help. Contact Benefits Advisory Group today to see how the right employee benefits package can boost your employer brand and help you reach your goals.