Tuition reimbursement programs still thrive in tough times
Apple, MGM Resorts International, Starbucks Corp., United Parcel Service and many more large corporations still have something in common, despite being in very different industries: tuition reimbursement opportunities for employees. Even with glum economic forecasts and the naysayers constantly weighing against a recovery, this tried-and-true company benefit, even with the prospect of it getting quite expensive if a lot of employees choose to participate, is still alive and well in down times. And it's probably more enticing than ever for the American worker.
America is in the midst of a job market retrenching. Jobs that once seemed secure are changing, and those who choose to not move with the change are at a strong disadvantage. The jobless are retooling skills and entering new fields. Competition is fierce for job openings, and employers want staff that understands the importance of details and specific disciplines along with an equal dose of skill-set variety as well.
As a result, technical schools, community colleges and universities alike are seeing enrollment boosts, and mostly in fields that show a good chance of landing a job at the end of the course of study. Overall, enrollment in degree-granting institutions increased 37 percent between 2000 and 2010, more than triple the 11 percent increase from 1990 to 2000, the National Center for Education Statistics reported.
Even still, colleges are changing and adding to curriculum to keep pace with changing employer demands. One way corporate America can better leverage its existing personnel and entice solid, flexible new hires is by offering educational opportunities, both within the company as well as reimbursements for degree-seeking employees.
Tuition reimbursement packages can run the gamut. According to a May Huffington Post report, Deloitte & Touche offers up to $10,000 in annual education reimbursement benefits. The report also noted that UPS gave about $24 million in education support to students in 2010, and Lockheed Martin Corp. offers up to $7,500 per year in reimbursements, Apple $5,000 per year and Starbucks between $500 and $1,000 per year, all with certain requirements tied to them like part-time or full-time status, length of term with a company, reason for pursuing a degree, among others.
The bigger allotments don't necessarily mean a better offering either. One thing the student must consider is a potential tax consequence.
If an employer were to reimburse tuition in excess of $5,250 in a year, the amount above that figure is considered taxable income, per the IRS. Like plenty of other tax provisions, this one is set to expire at the end of this year, meaning all reimbursements would then be lumped onto an employee's W-2 as income.
The hope is that extending this benefit would be a political layup. But those looking to take advantage of this benefit may want to keep their eyes and ears open about the news surrounding this tax issue, among many others.
Nonetheless, tuition reimbursement remains one of the more popular benefits a company can offer. And given the retooling of skills around America, it will likely stay that way for some time
Randy Stollar, director of global compensation and benefits for casino entertainment leader International Game Technology, said the company's educational commitment to its roughly 4,500 employees has remained strong, even in the economic downturn. The company has had a long-standing $2,500 per year reimbursement for its full- and part-time employees pursuing degrees from an accredited institution.
The degree must also show an application to the employee's work field or somehow help with aspirations toward future upward movement in the company. Other degrees could be considered, Stollar said, but the company evaluates on a case-by-case basis. IGT's reimbursement covers course work fees, textbooks, computer software and testing materials.
"It's what we call the employment value proposition and why you'd choose IGT over another company," Stollar said about the benefit.
For the past few years, IGT's executive team has also looked closely at how the company delivers education internally as well. With the help of staff and external consultants, IGT offers on-site training in a variety of areas.
Certification programs, workshops and seminars in professional skills, communication, leadership, sales and even technical training are available weekly.
It's the employer's way of looking to better its people on all fronts as well as in their current positions, Stollar explained. And the biggest perk for employees is that these classes do not count against the $2,500 annual reimbursement allotment.
"The reason for that is people are really wanting to hone skills in a tighter labor market. We talk to colleges both locally and out of state, and colleagues and professionals in the HR field; there is an increased desire from employees to enhance skill sets and knowledge," he added.
That internal focus can also be seen at MGM Resorts. Clark County's largest employer, with about 55,000 on its local payroll, has offered tuition reimbursement for more than two decades. It's what the company must do "in order to remain competitive as an employer of choice," said Sandra Shulman, leadership development manager for MGM Resorts.
On any given day, at the company's MGM University facility, executives, line-level staff, managers and others could be taking PowerPoint or Excel classes spanning from introductory to mastery level in rigor, none of which counts against the $2,100 per year reimbursement benefit full-time employees receive for pursuing a degree. The company's desire to better employee knowledge sets from within is matched by its flexibility in the degree types it allows employees to pursue at accredited schools. That English or humanities degree for a line-level worker is also eligible for reimbursement at MGM Resorts.
"We really want to support our employees and (our) ideal employee is someone who wants to better themselves," Shulman said.
MGM Resorts offers plenty of other educational opportunities internally that don't cost a dime toward tuition reimbursement, Shulman added. Aspire, a 12-week mentorship program for people wanting to work in a leadership role in a particular part of the company, is one example. Executive leadership programs like its Leadership Institute are another option for those looking to move beyond middle or upper management and into the executive ranks.
Given that MGM's workforce is in a 24/7 industry, it also is important for the resort operator to bring schedule flexibility both for those taking classes it hosts in-house (some can start as early as 7 a.m.) and to those pursuing a degree. In doing so, MGM Resorts has partnerships with University of Phoenix and Capella University to help bring online offerings and more opportunities to take classes at the most convenient time. Employees also enjoy a 5 percent discount on University of Phoenix and 10 percent discount on Capella courses.
School connection
Partnerships like the one MGM Resorts has with University of Phoenix are not unique in the world of tuition reimbursement. A partnership can be as simple as a tuition discount or be more involved by having school staff coming on site to teach classes, said Kathy Gamboa, Nevada and Idaho territory vice president for University of Phoenix.
These relationships take time and aren't cemented after a meeting or two, Gamboa said. University of Phoenix has had a long history in the valley and only finalized its MGM Resorts relationship in the past year.
"We need to make sure that what we're doing meets the needs of their students and their staff," she said.
The school's ability to do what she refers to as "mirroring the dynamics of the workplace" is a big reason for the partnership, Gamboa said. In the past few years, University of Phoenix created its Education to Careers program, which works to counsel students on what to expect in the field they aspire to enter. By listening to employers, students and its many instructors who also work in their respective fields, the university uses workshops, seminars and one-on-one meetings to help give students as clear a picture as possible of the work environment in their field.
"We want to be able to make sure our students have the ideal tools necessary for those jobs," Gamboa added.
University of Phoenix has roughly 1,800 employer partnerships nationwide. Some of the bigger companies the university partners with include Microsoft, Oracle Sodexo, Caesars Entertainment Corp. and MGM Resorts.
And while online offerings are important options for employees, Gamboa said about 70 percent of its Nevada students still prefer the classroom environment. Some may take online classes in addition to their classroom-based course work as well. Nonetheless, whether they are online courses or not, Gamboa remains impressed with the willingness of both employers and employees to invest in education.
"I think what's amazing to me is you have a very high level of employees engaged in education. And these companies are very supportive (and) realize the benefit of employees with a bachelor's or associate degree and their greater benefit to the community as a whole," Gamboa said.
Even on the in-house training side of things, partnerships with local colleges can still be created. Stollar sees IGT reaching out to local colleges for different types of in-house training options as well.
"We took the approach of 'enhance before expand outside.' Having said that, IGT is now really ramping up our community relations activity," he said. "We anticipate opportunities to work in the future with local universities like UNLV."
Meni Sarris, director of UNLV's continuing education department, fields requests and initiates contact with area businesses that often lead to the school conducting workshops, seminars on a specific technology or skill.
And companies continue to reach out for help in other categories like leadership training, accounting, language classes, human resources topics, public relations courses, business and other writing courses, Sarris said. Lately computer tablet classes, like ones that cover Apple's iPad, are a hit.
"The big ones are business-related," he said. "But the technology ones are always evolving too. The big class now is the iPads, but there are always plenty of Adobe (classes) and others."
