The idea of employer-sponsored education isn’t necessarily a new one. For example, in professional fields such as healthcare, employers will often pay for employees to receive continuing education.
Traditionally, however, the concept was that employers would pay for graduate school so employees could earn an advanced degree. Now, with so many sources of online education and the need for certain skills, like technical skills, employers are also exploring other types of continuing education.
For example, employers may pay for graphic designers to advance their skills with web coding courses which can be done online or at a technology school. Another example involves content marketers, whose employers might pay for them to advance their skills and stay ahead of trends in the industry through participation in a conference.
So, how else can paying for an employee’s education benefit everyone involved?
How Does Continuing Education Benefit the Employer and the Employee?
For employers, when they invest in their employees, they bring new skills into the workplace. We’re in a rapidly changing, innovation-driven world, and this is especially true in the online marketing and technology industries. Staying ahead of trends and skills can be invaluable. When employers focus on investing in employees through skills development, it’s going to improve productivity, capability, and innovation overall.
How Can Employers Benefit
The skills gap is something that’s also impacting businesses around the world. For example, according to research from the Korn Ferry Institute, the global talent shortage could reach more than 85 million people by 2030. The digital skills gap is currently impeding digital transformations at an estimated 54% of companies already, and by 2020, the technology, media and telecommunications industry may see a shortage of more than 1.1 million skilled workers throughout the world.
When employers pay for continuing education programs of any kind, they’re ultimately working on closing their own skills gap. Additionally, employees can share what they learn, so employers can establish an internal talent pipeline that educates from within.
A lot of employees also see continuing education opportunities as a work perk, which can help employers recruit top talent, especially if they’re not able to offer more money or generous bonuses. If an employer shows they are willing to invest in the future of an employee, that employee is more likely to be engaged and happy in his or her current position. This helps improve employee retention and boost productivity.
How Can Employees Benefit
From the perspective of employees, employer-sponsored education can save them a considerable amount of money as
A traditional college program can cost over $30,000 annually, and even non-traditional programs, such as coding bootcamps, can cost tens of thousands. Not everyone can pay this out of pocket, and some rely on loans. To put it in perspective, federal graduate loan interest rates range from 6.6% to 7.6%; private loan rates range from the mid-single digits to over 14%.
Taking on these burdens can strain an employee’s finances and productivity as a result. While it sounds like an employee’s problem, this may fall back on the employer’s bottom line. After all, financial stress is a leading stressor and is pervasive in the workplace.
It has already been mentioned that extra skills can help an employer, and the same is certainly true for employees. With additional skills on their resume, it can improve their future earning power much later in their careers. Workers with additional education make significantly more money than their undergrad counterparts, and they are less likely to be unemployed according the Bureau of Labor Statistics.
This is also true for many non-traditional education programs. For example, coding bootcamp graduates reported making about 50.5% more in salary after leaving the program. Furthermore, there are several marketing certification programs shown to boost salary (anywhere from 1% to 6%) according to Payscale.
Are There Any Drawbacks?
While continuing education has plenty of advantages, there are drawbacks to consider, especially from the perspective of employers.
As mentioned, there is the cost. Employers can’t pay for everyone’s education if the money isn’t there. However, alternatives such as online education programs may reduce those costs significantly. Some of the more expensive options include online college (rather than online courses), full graduate-level programs, and some of the larger technology seminars employers might pay to have employees attend.
Additionally, it may not be enticing to pay for someone’s education, them immediately start paying them more money. This could be problematic from a budget standpoint. It’s important to establish salary expectations upfront, and remember that these skills and certifications should ideally be contributing to greater revenue potential.
It can be a risky investment in some cases. If an employer pays for education costs, an employee ultimately leaving the company too soon would equate to a lost investment.
When Is Continuing Education Worth It?
As with anything, employers should be strategic with any expense, especially covering employee education costs. There should be a clear, defined reason and return that’s in line with the needs of the business and overall objectives. For example, if you need someone with specific digital skills, you may find that your investment is lower if you pay for a current employee to learn those skills as opposed to bringing someone new on board.
If you’re unsure of whether or not the investment would be worth it, start small. Start with individual online courses for certain employees and see how that goes. Depending on the results, you can build out your employee education program over time and scale it as needed.
Continuing education can be a great way for employers to fill their skills gap, nurture employees to improve retention, and be appealing from a recruitment standpoint. As always, there are costs, risks, pros, cons to weigh before making the call.
This guest post is from Andrew, a Content Associate for Lendedu – a website that helps consumers, graduates, small business owners, and more with their finances. When he’s not working, you can find Andrew hiking or hanging with his cat Colby.