It’s no secret that an effective employee retention strategy is crucial for success. Having a high employee turnover rate not only negatively impacts employee morale–it’s also costing your business thousands of dollars.
The Bureau of Labor Statistics reported that the average turnover rate in the hospitality industry was 85% in 2021. With the competitive job market, it’s more important than ever to invest in your employees, while allowing them to invest in themselves and in their education. This is why offering tuition reimbursement benefits has become an emerging trend in the service and hospitality industry. In fact, CNBC reports that 88% of employers are already offering or considering offering a tuition reimbursement program for employees in 2023. Read more to find out why employers are offering this benefit, and how to lower turnover rate using a tuition reimbursement program.
Let’s do some math.
Sitting down and calculating the cost of turnover is not a fun task, but it is essential if you want to manage business expenses. When hiring new talent, you’ll have to account for recruitment, onboarding, and training costs.
Here’s an example of how your business can calculate how much turnover is costing you per employee using an average hourly pay of $15:
A full-time employee making $15 an hour roughly makes $30,000 annually.
A full-time manager making $25 an hour roughly makes $50,000 annually.
Including taxes and any benefits such as healthcare, the hourly cost is about $50 combined. That means that one week of training for a full-time employee equals about $2,000.
That’s a lot of money you could be putting towards developing an employee retention strategy that will save you money, time, and headache in the future.
Why do employees quit in the first place?
One of the biggest reasons employees may leave a job is due to a lack of benefits, or to secure a better opportunity/career path. So, offering a benefits package to employees is a key to reducing turnover costs. Tuition reimbursement is an employee benefit that has been shown to effectively increase employee retention, satisfaction, and morale. Many large corporations and small businesses alike have begun to offer this benefit for employees in the past few years, and the demand for tuition reimbursement benefits is only increasing. According to a study by EdAssist, 71% of participants rated tuition assistance among the best benefits offered by their employers after healthcare.
Likewise, a lack of benefits also can lead to a negative workplace culture among employees, leading to decreased morale and productivity. This can be especially true in the service industry.
Not only do tuition reimbursement benefits retain employees, they have also been shown to create a stronger employee base as well. BrightHorizons reports that 82% of respondents said the skills or degree earned through their employer’s tuition reimbursement program helped them be a more effective employee and 84% feel it helped them prepare for the future of work
Save Money with Operation Graduate
At Operation Graduate, we help employers reduce their turnover costs by providing tuition reimbursement benefits. Our low-cost, tax-free program is quick and easy to set up, and will make your employees stick around for at least the length of their program. The best part is, you don’t pay unless an employee chooses to enroll. Our program is low-risk, and will save you money in onboarding, training, and turnover costs.
Ready to find out more? Click the link below to schedule a meeting with us to discuss how your business can benefit from tuition reimbursement benefits.