You Paid for the Skills, Now Keep Them: Tuition Reimbursement and Voluntary Turnover

Abstract

Does investing in employees' marketable skills reduce turnover? This study uses insights from human capital theory to explain how general skill development and promotion relate to voluntary turnover. Data from 9,439 salaried employees of a large manufacturer show that participation in tuition reimbursement reduces turnover while employees are in school. Voluntary turnover increases when individuals earn graduate degrees but is significantly reduced if they are subsequently promoted.