Authored by: Andrew Bassett, Business Development Lead at RX-M
(Jan. 20, 2021) – Many organizations offer Tuition Assistance Programs (TAPs) to their employees. These programs are typically aligned with HR directives, such as employee attraction and retention, as well as employee growth and career pathing.
A 2017 World at Work survey found that 92 percent of U.S. companies offer some form of tuition-assistance program.TalentCulture, 2018
Strategic application of TAP funds can be valuable to not only IT employees but also to IT organizations as a whole. New skills and technical certifications are valuable to employees during annual reviews and promotion windows, while at the business level, broadly applied training can support critical technology initiatives, such as digital transformations and cloud adoption.
TAP for IT Training and IT Certification Programs
Allowable uses for TAP funds have evolved over the years. Some narrowly scoped models restrict funds to college accredited and degree-oriented programs, though most are broader (I met an individual years ago who earned a pilot’s license through their company’s TAP). Many employers even support TAP fund usage for training taking place during business hours, preserving employee vacation time.
TAP programs often place a particular emphasis on IT training. For example, some firms provide 10 days of company sponsored IT training during a given year and recommend the use of TAP funds for specific IT certifications or skills development synchronized with the firm’s long-term goals, perceived knowledge gaps and other high-level factors.
In a recent McKinsey Global Survey, 87 percent of executives said they were experiencing skill gaps in the workforce or expected them within a few years. But less than half of respondents had a clear sense of how to address the problem… The coronavirus pandemic has made this question more urgent.McKinsey & Company, 2020
Positive TAP Outcomes
- Tuition-assistance program participants reported 89% increased confidence in ability to perform on the job, 94% reported that the knowledge was useful to their job (Ed Assist, 2012)
- 76% of employees said they are more likely to stay with their employer because of its tuition reimbursement benefit (Brighthorizons, 2019)
- 88% of Gen Z workers say they are more likely to recommend their employer because of its education benefits (Brighthorizons, 2019)
- A two-year study showed that education reimbursement programs have a 129% return on investment, that means for every dollar the company invests it generates an additional $1.29 (Lumina Foundation, 2015)
- ERP (TAP) participants are 10% more likely to be promoted, 7.5% more likely to receive an internal transfer, and have an 8% higher retention rate (Lumina Foundation, 2015)
- ERP (TAP) participants are 43% more likely to be paid more (Lumina Foundation, 2015)
Use It or Lose It
Most TAP programs establish pools of training funds annually, with unused funds expiring if not used. The sheer volume of annually expiring training dollars translates to an unthinkable shortfall in ongoing education. Considering the rapid pace of technical evolution and the self-reported corporate skills gap, leaving this money on the table may not be the best option.
Less than 10% of workers at companies that offer tuition reimbursement use the benefit.Wall Street Journal, 2018
Maximizing Your TAP Benefits
Here are several ways you can make the most out of your TAP benefits:
- Identify the types of courses and training that qualify for tuition assistance
- Determine what expenses are allowed and identify the monetary value of your TAP (most are set at a maximum allowance of $5,2501)
- Identify your TAP start and end dates for a given year
- Identify and complete the necessary paperwork
- Find out if training days will require personal-days/vacation time
- Ensure the courses in question map to corporate IT initiatives and your personal development plan
- Work with your IT training provider to ensure they can meet the requirements for compliance with your TAP
Given the wide range of benefits and applications, making better use of TAP programs is a great move for companies and individuals. As Benjamin Franklin once said, “An investment in knowledge pays the best interest.”
1 If your employer pays more than $5,250 in educational benefits for you during the year, you must generally pay tax on the amount over $5,250. – IRS Information Center, 2020