Tuition Reimbursement Programs

I'm a new training manager at a small (<120) person healthcare company. I am setting up a tuition reimbursement program and wonder if you have any resourses I can model my program after.

I have personally benefitted from previous employers programs and am using my last company's program as a model, but it was a much larger company and I'm not sure that it makes sense at my new company.

Any info you can share would be much appreciated.

First, I'm impressed that such a small company would have a dedicated training manager. That says good things about your organization to me. I'm a big fan of effective training and a huge hater of waste-your-time training. I assume you do the former.

My experience with tuition reimbursement is limited, but I'll share what I know.

Back when I worked for a retail company, we didn't offer "tuition reimbursement." We offered "scholarships." Same thing, really, but without all the strings attached. You had to have been there for a year (I think) and be a satisfactory employee. The amount of money was not huge (can't remember precisely, but it was under $2000 a year), and there as no repayment provision if you quit. In fact, as long as you worked for us during the summer, we'd renew the scholarship every year.

This was fantastically effective as a recruiting tool for high school/college students. Parents pushed their kids to take jobs with us because of the extra money for college. I don't know what kind of health care company you are, but if you are someplace with high turnover, then this might work for you.

Other companies I've worked for have had a more traditional approach--paying 50-100% of tuition, upon satisfactory course completion. Satisfactory, being a grade of C or higher. The restrictions placed around it include a yearly tuition limit and a requirement that the course be directed towards a degree or certification that is relevant to the company. No tuition reimbursement towards your real estate license (we don't do that) or art history, but engineering, HR, business, etc are all covered.

The key thing with this type of program, where you are targeting a low turnover group, is repayment provisions. Make sure you have them, so people don't take your money for their degree and then disappear on you.

Make sure you treat your newly degreed or certified employees as external candidates when it comes to promotions. Let's say Bob makes $65,000 a year as a finance guy. He's a high quality employee and has been working on his MBA from a reputable school for the past 3 years. He finally graduates. (Yeah Bob!) Bob is now qualified for a manager position that has a salary midpoint of $85,000. If he were an external candidate, you'd hire him at $85,000. However, your company guidelines state that no one be given more than a 10% increase ($71,500). MAKE SURE YOU HAVE AN EXCEPTION THAT ALLOWS YOU TO BRING BOB UP TO MIDPOINT REGARDLESS OF THE JUMP.

Yes, I meant to put that in all caps. Your competitor doesn't have a problem paying a newly minted MBA from that school that much money. You wouldn't have a problem paying someone with Bob's credentials that much money if he were external. Don't hold Bob back. Bob will get resentful and he will leave, even being willing to pay back some of the cost of his tuition.

Non HR Types stop reading right now. The rest of this is secret HR stuff.

And while I do think it is a good idea to require repayment if the employee leaves within a set time (full repayment if less than one year, 2/3 repayment if less than 2 years, 1/3 repayment if less than 3, is my general guideline), keep in mind that it's next to impossible to get that money back if the person doesn't willingly cough up the check. Even if you could deduct what they owe from their last check (some states would allow this and some would not), it's doubtful that everyone's last check would be equal to or greater than the amount of tuition they owe. Do you really want to sue? No, you don't. But don't tell the employees that. Shhhh.