Optimising education as an employee benefit

In figures released in the fourth quarter of 2021, job openings in the United States hit a record high for the sixth month in a row. Thanks to what some observers are calling the ‘Great Resignation’, many employers are having a hard time retaining employees, let alone recruiting new hires.

Jobseekers have the upper hand, and many are taking this opportunity to seek positions which offer competitive salaries, sign on bonuses, professional advancement, work/life balance and benefits that support their individual and family needs.

Employers are responding to “the great reassessment of work” by evaluating everything from compensation and work-life balance, to career development opportunities and benefits. One of the most valuable benefits, available to front-line workers and executives alike at giant firms from Amazon to Walmart, is free or heavily subsidised education and training. These programs give employees the opportunity to build their skills so they can get ahead. And in a tight and unpredictable labor market, they promise to help employers recruit and retain much-needed talent.

But although undergraduate or graduate tuition assistance has become widespread on paper, the reality is this financial support is severely underutilised. More than half of employers already offer undergraduate or graduate tuition assistance, according to the Society for Human Resource Management’s most recent benefits survey. But less than 10% of workers annually use tuition reimbursement when it is offered, according to one estimate.

It is time to stop wasting this opportunity. The stakes are just too high for workers and employers who want to thrive. Tuition support advances a broad range of business goals, including recruitment, retention, leadership development, and increased diversity. And the labour shortage amplifies the need for employers to develop talent within the organization, upskilling and reskilling their existing workforce. With a little reimagining, businesses can design flexible education benefits that create career pathways for existing employees, help employers meet their long-term goals, and improve outcomes for workers.

Making education benefits work

Several companies lead the way in adapting education programs to work for all stakeholders. From their efforts, we can derive a few fundamental principles for a successful education benefit. These include:

Vocal support from the C-suite: In 2019, Papa John’s created Dough & Degrees, an initiative to actively promote the educational benefits it offers employees. The pizza chain advertises Dough & Degrees in its job postings and stores, and features the program prominently on its website. Importantly, Papa John’s CEO, Rob Lynch, also speaks frequently about the opportunity it affords the company’s employees. Like Lynch, C-suite leaders should set the expectation that education benefits exist to be used and spread said message throughout the organisation. After all, on a day-to-day level, an employee needs the support of their manager (and their manager’s manager) to fit classes into their work schedule.

Tuition paid up front:  Tuition reimbursement programs require employees to pay for their classes up front, then wait to be repaid, potentially for months. Low-income employees are unlikely to have the necessary cash on hand, which is likely one reason for reimbursement programs’ poor participation.

Recognising this challenge, employers including Disney, T-Mobile, and ManTech, are funding tuition up front for employees who enroll at one of their partner institutions. This approach increases access to educational programs by removing economic barriers and helps reduce student debt.

Clear career paths: More education can lead to a more desirable career path and a higher salary. But taking classes while working can be taxing—eating up spare time and increasing an individual’s mental burden. Employees need to be certain the sacrifice is worth it. Employers can help by providing a clear map of the rewards: if you acquire this specific certificate or degree, you’ll be eligible for this promotion, raise and/or increase in responsibility.

For instance, ManTech, a government contractor, partnered with Purdue University Global to develop a three-course training program which prepares employees for the Certified Information Systems Security Professional (CISSP) credential–a requirement for the company’s work on federal cybersecurity contracts and a key certification for employees in the field.

More short-term programs: Some employees might prefer a certificate program or boot camp to a four-year degree. These shorter programs may be easier for working parents who struggle to find affordable childcare. They may also appeal to younger employees, who are increasingly looking for short-term training programs, perhaps because they are perceived as providing a more direct route to increased responsibilities and higher pay.

Amazon’s Career Choice program supports employees who want to earn vocational certificates or associate degrees in high-demand fields, covering up to 95% of tuition and fees up front.

Progression is the new wage

Tuition assistance programs are quickly becoming an employee expectation. As Ardine Williams, Amazon’s vice president of workforce development, recently told USA Today, “Career progression is the new minimum wage.”

Now is the time for leadership to align their programs to the needs of today’s workforce–and to their own strategic talent goals.