Return on Investment


It’s important to monitor key performance indicators such as return on investment (ROI) and net savings to determine the value of tuition assistance programs. 

However, only 5 percent of American employers do any kind of measurement of their tuition assistance programs, according to a 2017 report from the Lumina Foundation. That’s shocking considering that employers spend $28 billion each year on tuition reimbursement, accounting for 15 percent of all expenditures on training and education. 

Measurement Is Possible 

The foundation, which is an independent nonprofit organization that promotes higher education, has studied several employers’ tuition assistance programs. One of its goals in performing is to create a “rigorous and repeatable methodology” to measure ROI, as explained in its groundbreaking research report about Cigna. 

Here is a sample of some of the foundation’s findings: 

Unnamed regional bank: $700,000 net savings over four years 

Advocate Health Care: $1.3 million net savings over four years 

Unnamed communications technology company: $54.2 million in net savings over three years 

Cigna: 129% return on investment 

Discover: 144% return on investment 

What Can Be Measured 

The three quantitative benefits the Lumina Foundation researches are promotion, transfers and retention. While the numbers vary for each company researched, the Lumina Foundation found benefits in all three areas. 

The Cigna report says tuition assistance program participants were 10% more likely to be promoted, 7.5% more likely to be transferred and 8% more likely to be retained than non-participants. 

The increase in retention, compared with non-participants. In addition, the Discover report says there was a nearly half-day decrease in absentee days for participants. 

Companies looking to measure the performance of their tuition assistance programs can start by looking at promotions, transfers and retention. These figures can be quantified, providing insight into direct ROI and setting a baseline for improvements. Increases in loyalty, job satisfaction and program participation might be used to measure indirect ROI. 


In addition to retention, a tuition assistance program may be able to improve recruitment in two ways.  First, it creates a strong employer value proposition (EVP), which can help a company stand out from its competitors when seeking talent. Second, higher retention rates actually reduce the need for recruitment, as fewer positions need to be filled. 

An EVP — essentially, how the organization brands itself to potential and current employees — should ideally address opportunities and rewards, according to Gartner. An attractive EVP can increase an employer’s reach into the labor market by 50%, the consulting firm says. 

Tuition reimbursement can help define the EVP, as it’s a benefit highly valued by potential employees.  Harvard Business Review asked 2,000 workers what benefits, and perks would make them consider a lower-paying position and a higher-paying one. Of the respondents, 44% said that tuition assistance would be a consideration. In comparison, the response rate was lower for flashy benefits like free snacks (32%) and team bonding events (20%). 

Many factors play into ROI measurements for recruitment, but companies should not overlook in their calculations the contribution that tuition assistance programs make in attracting potential employees and positioning their companies as employers of choice.