By Greg Furstner

      If you’re thinking of offering an education reimbursement or tuition reimbursement program for your employees, you are not alone. Almost every large employer in America already offers it as one of the key benefits for attracting and retaining employees. However, smaller employers are often cautious before jumping into the reimbursement game, even though it can be in the top five of employee benefits desired by potential and current employees.

      To be competitive in the marketplace, small businesses need to offer more than just an entrepreneurial atmosphere. Here are the items to consider before offering a tuition reimbursement program.

Advantages
      Here are some of the benefits to offering tuition reimbursement:

• Increased retention and attraction of employees – This can differentiate you from your competition. It shows that you care about your employees and their development, and not just getting all you can from them.
• Improved knowledge and skills – Who doesn’t want their employees to increase their skill set, which leads to higher productivity and helps them succeed more on the job? Just think of the enhanced creativity and new ideas infused into your business. It may just be the competitive advantage you have been seeking.
• Enhance your training department – Most small businesses cannot afford their own training department. For a small annual cost, you can improve your company by encouraging your employees to seek outside training, undergraduate or advanced degrees. This can all be accomplished without your own trainer or on-site classes.

Challenges
      What should a small business be aware of before offering tuition reimbursement?

• Setting a budget – Before offering a reimbursement program, many companies try to gauge interest levels or number of employees who will take advantage of this benefit. Still, it may be hard to be certain of exact costs. This is where guidelines below will pay a key role in maintaining control of program costs and not giving the CFO something else to worry about. But, until you begin the program, you may not know for sure.
• Increased expectations – Employees who work hard in their off time to better themselves want their employer to recognize that they have improved their skills or acquired new skills. But, small businesses often lack the depth or career paths to immediately promote or increase the salary of an employee who has graduated with a new degree. Many times employers cannot envision the employee in a new role (especially moving from non-exempt to exempt roles) and consider outside candidates first when positions are available. It’s common to hear of employees who felt they had to take a position at another company in order to use their newfound knowledge.
• Here come the questions – Which employees are eligible? Will you let employees telecommute or work flex hours to take classes? Which degrees will you approve? Can employees receive tuition reimbursement for learning Spanish? You will get these questions and more, so make sure you have thought this through. A comprehensive policy that gives the guidelines and approvals necessary to receive reimbursement is essential.

Policy
      Here are some of the essential items to be addressed in a tuition reimbursement policy.

• Eligibility – How long should an employee be with your company before they are eligible for this benefit (e.g., six months, one year)? Should they be an employee in good standing without a warning or reprimand for six months or a year? (Probably so.)
• What will you reimburse for? Many companies will only reimburse for business or related degrees that can be applied at the company. An example is the employee from a marketing company requesting reimbursement for veterinary school. Also, be clear if only tuition will be covered or if books and fees also are covered.
• How much will you pay? The IRS allows companies to reimburse tax free up to $5,250 per year. That may be too rich for some small companies. You might want to start small at $1,500 or $2,000 per year until you see how many employees take advantage of the program and what your budget can bear. In addition, maintain a standard of reimbursement for receiving good grades.
• Protect yourself – Most companies require employees to remain with the company for a certain amount of time after the last reimbursed class has ended; or the employee must repay the company for tuition that was reimbursed. This time can range from six months to one year. Some companies have a sliding scale: 100 percent for one year or less and 50 percent for one to two years, etc.
• Up front approval – Require employees to fill out a form for tuition reimbursement approval before signing up for any classes. This lets you ensure that employees are pursuing degrees or classes from accredited institutions or programs. If in doubt, ask for more documentation on the program. Also, make sure employees know the expectations while in the program: no studying at work, work quality should not suffer, etc.

      Employers who think through the expectations and guidelines of a tuition reimbursement program can positively position themselves in the race for superior talent. By recognizing achievements of those in the program and trying to leverage those talents, they will reap the rewards that this sought-after employee benefit can provide. In the end, employers may just end up with an extremely loyal workforce that enjoys where they work and out-produces the competition.

Greg Furstner, SPHR, CCP, is a managing partner of SalezWorks, LLC, an organization that is dedicated to the art of attracting, motivating, training and rewarding salespeople. You can reach him at (913) 221-5334 or .