Case Study


A Bright Future for State Farm
By Agatha Bordonaro
F

or an organization like State Farm, recruiting and retaining the best and brightest is more than aspirational — it’s mission critical. Holding more than 83 million insurance policies, selling about 100 different products and processing more than 39,000 claims a day, State Farm insures more homes, cars and watercraft than any other insurance company in the United States. And its more than 58,000 employees are the ones keeping that motor running. Not only must they be skilled at their jobs, but they also must be invested in the organization to ensure everything moves smoothly.

On top of that, around 10 years ago State Farm began to focus on employee count in larger metropolitan areas, where it was competing with other big employers.

“We were opening huge facilities — in large part call centers — with many IT employees in three major hubs in the south,” said Jeff Yerington, manager of industry education and tuition reimbursement for State Farm. “We were starting to have more and more issues with hiring and retaining these employees.”

So, in 2014, Yerington and his team decided to take a closer, more strategic look at one of the company’s top recruitment and retention tools: its tuition reimbursement program.

The Challenges
Through a deep dive into the tuition reimbursement program, Yerington and his team found that the time and effort to process tuition reimbursement requests were quite extensive for State Farm employees when compared with a typical expense request.

There was also a lack of insight into the outcomes of the program. “We had almost no data as far as the impact,” Yerington said. “I had information on two things: how many employees were participating and how much we spent. And that was essentially it.”

Further, Yerington’s team discovered that State Farm employees faced two distinct barriers to participating in the program. First, the cost: Education is expensive, and since they were paying their tuition up front at most universities, employees were limited by their personal financial constraints. Second, for those who did enroll, the plethora of options could be paralyzing.

“We have no limits on what schools our employees can attend. Our only requirement regarding schools is they have to be regionally accredited,” Yerington explained. “On the good side, it gives employees all the choice in the world. On the downside, if you don’t know where you want to go to school, you’re not sure what program fits you best, etc., you can be really lost — and sometimes the advice of your cube mate is not the best advice in the world.”

Snapshot

State Farm partners with Bright Horizons EdAssist to reap real rewards from its tuition reimbursement program.
To help solve these challenges and improve the program, Yerington’s team turned to Bright Horizons EdAssist Solutions, a provider of strategic tuition assistance program management.
The Solutions
Patrick Donovan, senior vice president for education advisory services at Bright Horizons, broke down State Farm’s business challenges into three main areas. First, it needed to streamline its processing of tuition assistance paperwork; second, it needed to instill the program with benchmarks and metrics to assess its impact; and third, it needed to remove financial and other barriers to entry to ensure full adoption and yield maximum benefit to both employees and employer.

“They just wanted better management, better analytics, better options, better discounts along the way and a better user experience,” Donovan said.

To address the first challenge, State Farm outsourced the processing of tuition assistance paperwork to EdAssist. “Our goal for employees was that … the new system would be no different from anything else they would do at State Farm as far as processing and expense,” Yerington said. “What we didn’t want was something that was so radically different that it was difficult to learn. The EdAssist system is very simple to use. We rarely get ‘how to’ questions ever on the actual system.”

Next, EdAssist created benchmarks to measure the impact of State Farm’s tuition assistance program. EdAssist relied on its experience with and knowledge gleaned from its cadre of clients and learners, as well as on direct conversations with State Farm’s learning team and research into State Farm’s existing tuition program.

“Clients send us in their eligibility files, their employee files, the hire dates of the employees and the departure dates, whether they are in good standing,” Donovan said. “What that means is we can tell clients directly the difference in retention between people doing an education program and those who do not.”

With the move to EdAssist, State Farm is now able to get detailed data on retention for participants in the tuition assistance program versus those not in the program, as well as stats on graduation rates and spend per school.

The third goal of State Farm’s partnership with EdAssist was to reduce the two major obstacles barring employees from participating in the tuition assistance program: the cost and the overwhelming number of choices.

“I had information on two things: how many employees were participating and how much we spent. And that was essentially it.”
— Jeff Yerington, manager of industry education and tuition reimbursement, State Farm
To address the cost, EdAssist leveraged its partnerships with about 220 schools to offer State Farm employees high-quality education programs at discounted rates. To tackle the other issue, EdAssist implemented full-service educational consulting services. EdAssist advisers are trained in the particular needs and goals of each would-be participant — from likely background to job skills to potential career aspirations — and can direct them to the best-suited schools and programs.
The Results
By outsourcing tuition-assistance processing, State Farm was able to reduce the employee count of the unit handling this work by one part-time and two full-time employees, a significant savings in salary and benefits.

EdAssist’s careful tracking of State Farm’s tuition assistance program also yielded helpful analytics for Yerington’s team. It found that 89 percent of participants in the tuition reimbursement program stayed with State Farm, of those who participated in the program, 51 percent were relatively new to State Farm, having between one and five years of tenure, while 49 percent had been with the company for six years or more.

“Fifty-one percent of our employees in the tuition-reimbursement program have one to five years of tenure, which tells us that a lot of our new employees really appreciate the tuition-reimbursement opportunity,” Yerington said. “The data that we were starting to get has helped us tweak programs because we were able to point back to actual numbers.”

For example, State Farm had a requirement in place for master’s degree programs that was preventing some employees from pursuing the degree because “they were going to have to do something else first that would probably take two years, on average,” Yerington said. But a separate EdAssist study showed that, on average, 93 percent of U.S. employees who have used education assistance say they’ve developed the skills needed for growth within their organization; 79 percent say tuition assistance makes them more likely to stay with the organization; 85 percent say the program is important to job satisfaction; and 6 out of 10 were offered a promotion, new opportunities within the organization or other professional benefits. These positive benefits were confirmed by State Farm’s internal surveys, so the company opted to remove the problematic requirement for master’s degree programs in March 2019.

“We know anecdotally that we already have a number more in master’s degree programs than we had prior,” Yerington said.

Finally, the addition of lower-cost options and one-on-one educational advising has resulted in significantly more — and more impactful — use of the program. It has also helped shape employees’ experiences at State Farm, resulting in improved job performance, career mobility and employee engagement, as well as higher retention, all of which also have contributed to more successful recruiting efforts. EdAssist has found that 84 percent of those who use the tuition-assistance program think it was important in their decision to join the company in the first place.

When implementing these solutions, State Farm ensured it had executive buy-in and a culture that prioritized employee development. “They were engaged with us all along the way in terms of defining the policy, getting the data organized and to us in a usable and easy format, giving us access to their corporate communications folks so that we could make sure that the way they wanted to communicate the program worked within their own corporate communication policies — they did all that,” Donovan said. “It was so central to the strategy of State Farm.”

Agatha Bordonaro is a writer based in New York. She can be reached at editor@CLOmedia.com.