Education Benefits and Employee Retention

This literature review investigates the complex relationship between employer-sponsored education benefits and employee retention among workers in the United States. Though useful, much of the existing literature focuses primarily on internal training and employee development programs. Because education benefit programs provide access to degrees and credentials that are more marketable and desirable to competing employers than internal training qualifications, the observed relationships between internal training programs and employee retention may inaccurately estimate the retention value of an education benefit program. This study finds that although an employee actively using an education benefit is more likely to stay with the company, an employee’s decision to remain with the firm after completing an education program is less certain and depends on the relative strength of two opposing factors: an obligation to repay the firm’s generosity and the employee’s economic imperative to constantly seek the most lucrative job opportunity. Education programs are likely to be most effective in retaining employees when those training programs are associated with clearly identified internal promotion opportunities.