Strategically speaking, employers need to do a better job on aligning their tuition assistance programs with their talent management objectives, according to research by Bersin and Associates Research.

Despite 82% of companies reporting that they offer tuition reimbursement to enhance their talent pool, only 48% have aligned tuition assistance programs with their actual talent needs, notes the California-based consulting firm, which focuses on talent management.

Between August and November 2008, the firm examined tuition benefits at more than 400 employers. Researchers found that U.S. and foreign companies allocated about $16.5 billon per year to tuition assistance programs.

Forty percent of large U.S. employers (10,000 employees or more) invested nearly $10 million annually on tuition reimbursement, spending an annual average of $3,769 per employee. 

"Most tuition assistance programs are institutional and considered to be a standard employee benefit," says Chris Howard, director of research at Bersin and Associates.

"Consequently, most companies do not capitalize on the potential to use these dollars to support specific talent management objectives. In fact, 27% of the companies we surveyed do not measure program effectiveness in any way," adds Howard, who wrote the report, "Best Practices for Maximizing a Key Talent Investment", which details the study's findings.

Other key conclusions included:

• When aligned with overall organizational talent strategies, tuition assistance can have a positive impact on retention rates. Yet employers that fail to implement such a strategy can experience a drop as much as 50% in their programs.

• About 63% of respondents ranked the value of their tuition assistance as high or moderate, while 2% reported that the benefit had no value at all.

• High levels of employee participation are a key determinant of program value, yet participation rates vary from very low (below1%) when companies view tuition assistance solely as an employee benefit and an operating expense, to very high (above 10%) when companies view tuition assistance more strategically as an investment in human capital.

Related coverage:

• Straight A's for tuition benefits
• Are you getting bangs for your tuition reimbursement bucks?
• States can do more to help working adults attend college