Measuring the influence of employer-sponsored tuition benefits on employee retention and tenure

Millns, Matthew John

Publication

Measuring the influence of employer-sponsored tuition benefits on employee retention and tenure

Millns, Matthew John

Date

4/8/2022

Abstract

This quantitative research study builds on existing theoretical concepts of human capital management, expectancy theory, and psychological contracts to show that utilization of employer-sponsored tuition benefits (ESTB) by higher education employees directly correlates to increased employee tenure and retention. ESTB utilization over a 10-year period was measured using hierarchal logistic regression on a sample of 458 newly-hired employees broken down by employee class, ethnicity, and degree type. Results found that the 128 employees who utilized ESTB remained employed 3.08 years longer on average than employees who did not use the benefit, projected to increase by 6.6% on average for every 100% increase in tuition utilized. Employees who utilized the ESTB showed a 36.4% greater probability of remaining employed all 10 years with the odds of remaining with the organization all 10 years increasing by 98% for every additional year of undergraduate education awarded at $40,000 through the ESTB. There was also found to be a positive relationship between employee class and ESTB utilization with exempt employees and faculty driving the results. These are significant findings in the field of employer benefits, as this new research offers university leaders such as Chancellors, Chief Executive Officers (CEOs), Human Resource Executives, and Chief Financial Officers (CFOs) empirical evidence to strategically manage employee retention and tenure through the use of ESTB programs rather than simply relying on “gut instinct.”