In corporate America, assisting employees with their higher education expenses is a common employer benefit— but in the retail natural products world, not so much.
In its 2007 annual benefits survey, the Society for Human Resources Management found that 68 percent of the businesses sampled provided tuition assistance for undergraduate education, and 65 percent anted up for graduate education. But size makes a difference: Only 48 percent of employers with fewer than 100 employees helped with undergraduate expenses.
Contrast that with The Natural Foods Merchandiser's Market Overview research, which showed that only 22 percent of naturals retailers offered this benefit to full-time employees— down from 31 percent a year ago. Admittedly, most are small businesses, and the percentage does increase to 52 percent among stores with more than 6,000 square feet. Even so, naturals retailers aren't keeping pace with other industries, and might be skipping an employee benefit that could help their companies.
Paying for— or reimbursing— an employee's tuition could retain valued employees, attract others and bring new, valued skills to the workplace.
Kari Mitchell earned her master's degree in adult education and organizational development while working for three years as a human relations manager at Outpost Natural Foods Co-op in Milwaukee. The cooperative covered part of her tuition.
In addition, Mitchell found synergy between her job and her studies. "I could apply new concepts I was learning to my work," she says. "For school projects, I analyzed [the co-op's] safety program and evaluated our training programs. For my thesis, I worked on making our evaluation system more effective."
With 290 employees and three stores, Outpost has more resources than many naturals retailers. Nevertheless, Mitchell encourages smaller employers that can't pay as much in salary to offer education benefits to attract good applicants.
Such a program also could help your bottom line. According to Section 162 of the Internal Revenue Code, reimbursement of an employee's educational expense is deductible as an ordinary and necessary expense.
But before you start enrolling employees, consider the following issues:
What is your main purpose? To retain employees? Reward loyalty? Acquire beneficial skills for the business?
Clarifying your purpose will help subsequent decisions fall into line.
What subjects/courses will be covered?
Outpost has assisted employees with attaining degrees in nutrition, human resources, accounting and business.
At Weaver Street Market in Hillsborough, N.C., where 10 percent of the employees speak Spanish as a first language, the company offers a tuition benefit for English as a Second Language, and Spanish classes at a community college or private language school.
What types of learning institutions are covered?
Many companies' tuition-reimbursement programs require at least a passing grade from an accredited school.
How much will you pay per employee?
Obviously, this will depend on the prosperity of your business. Ocean Beach People's Organic Food Market in San Diego offers scholarships of up to $2,000 a year to employees in their senior year at an accredited California college or university. Weaver Street Market offers up to $300 for language classes.
The IRS allows employees to receive up to $5,250 per year as a tax-free benefit to cover tuition, books, supplies and equipment.
What are the eligibility requirements?
Ocean Beach People's requires full-time employment for three years. Outpost includes tuition assistance as part of the job offer to new employees.
Is there a payback requirement if the employee leaves the business?
Outpost's union contract provides for a prorated repayment schedule for employees who leave at one, two or three years after taking an employer-funded class. For nonunion staff, the terms of educational assistance are decided case by case.
How do employees apply for funds?
Typically, employers ask for a letter of intent or provide an application form. In a small business, the general manager or owner decides whether to approve the application. In larger companies with established education budgets, the HR manager makes the call.
Even if you can help only a few of your staff, education assistance can increase employee morale. As Weaver Street Market's HR manager Deborah Konneker puts it, "Employees think it is a neat benefit, whether they use it or not. It all goes into the ‘WSM is a good employer' outlook."
Carolee Colter is the principal of Community Consulting Group. Contact her at [email protected]
Natural Foods Merchandiser volume XXVIII/number 6/p. 34,36