Investing in college tuition as an employee benefit has significantly helped Bloomfield insurer Cigna improve its bottom line, according to a new study.
The analysis of Cigna’s education reimbursement program (ERP) shows every dollar the company puts into the program is returned and generates an additional $1.29 in savings – a 129 percent return on investment. Lumina Foundation, a national foundation focused on increasing postsecondary attainment, partnered with Cigna to design the study, which was conducted by Accenture, a global professional services company.
According to Lumina, the study of Cigna’s ERP offers a rare glimpse at the financial impact of tuition-assistance programs. About 60 percent of employers offer such support – investing an average of 10 percent of their learning and development budgets on tuition assistance – but only 2 to 5 percent of organizations evaluate the return of these investments.
Cigna’s study examined differences in rates of promotions, transfers and retention between employees who took advantage of ERP and employees who did not participate from 2012 to 2014, isolating factors such as employee tenure that could impact findings.
Jamie Merisotis, president and CEO of Lumina Foundation, said the release of the study demonstrates employee tuition isn’t a benefit cost, but rather an investment. “[It] positively impacts organizations’ bottom line. That should entice more C-suite leaders to embrace this approach,” Merisotis said in a statement.
The study also showed that Cigna’s ERP program increases career opportunity and employee retention, which drives financial payback. Program participants are 10 percent more likely to be promoted, 7.5 percent more likely to be transferred within Cigna, and 8 percent more likely to stay at the company, reducing talent management and recruiting costs.
