When you walk into your local Starbucks, Walmart, or Target you’re likely to see signs saying they are hiring. If you look closely, you’ll see that one of their employee benefits is some form of a free or subsidized college education.
Faced with headwinds from a rising minimum wage, disruptions associated with the COVID-19 pandemic, and competition from other employers, these large companies have realized that they must offer more reasons to get people to apply and to stay on as employees. And one way these companies are doing more is by offering education-as-a-benefit programs (see here, here, and here).
Unlike traditional employer benefits, however, education is as much about helping the company as it is about providing personal benefits for employees.
With Americans in almost $2 trillion of student loan debt, it’s no surprise that nine out of 10 U.S. employers offer some kind of education as a benefit. With so many employees having staggering student loan debt, or concerns about affording higher education, education as a benefit is an important option for employers.
There are a couple of ways employers can approach education as an employee benefit. They can offer payments or they can facilitate the program.
Tuition reimbursement often happens as the employee is pursuing the degree. More recently, some employers are providing payments to the employee specifically to help with student loans the employee has already accrued. Regardless, the onus is on the employee to pay for the credit and then be reimbursed afterward. Tuition reimbursement is good for employees who have completed their degree or already have some college credit under their belt. This is less valuable for employees who don’t have the financial means or the time to enroll in college.
Tuition assistance is similar, but it is typically paid upfront. The student can use the benefit when they enroll in the course so they don’t have to pay as much (or anything) out of pocket. This is a better option for students who don’t want to (or can’t) take out loans for college.
A third option that might work better for small to medium-sized businesses is to facilitate a program for their employees. Knowing what is most important for the employees, employers can identify partnerships that meet their needs and provide incentives (monetary or otherwise) to encourage employees to take advantage of these benefits. Employers can find programs that focus on lower-cost options, flexible options, or the ability to stack credentials into a degree.
Here are three ways these programs aid companies as they look to become more competitive and successful.
Potential employees comparison shop among workplaces before they apply. In addition to salary and health benefits, these potential employees want to know about career opportunities, future earning potential, and other benefits. These other benefits, ranging from mental health support to free education opportunities, are increasingly the major deciding factor for potential applicants. Education-as-a-benefit programs are common enough in some sectors that they are becoming an expectation rather than something special.
In today’s world, employees are constantly looking at their options for professional success. Where can they go to earn more? Who will provide them the opportunity to move up the professional ladder?
Beyond salaries and promotions, many employees are realizing that their long-term ceiling for success is dependent, to a large extent, on their educational foundation. Getting their first college courses or earning a degree can make them eligible for new positions. And what better and more convenient way to do that than participate in an education-as-a-benefit program with their current employer?
Every employer has a goal of increased company growth and success, and achieving that goal is dependent on the parallel growth of their existing loyal and well-performing employees. These are the employees who have already devoted years of service to the company and have significant institutional knowledge. They are the key to an organization’s future success.
The challenge for many companies, however, is that these important employees often lack the education and training to assume positions higher up in the company’s organization chart. This results in company’s having to hire outside candidates to fill lower and middle-level management positions, which translates to increased costs and greater potential for turnover.
Education-as-a-benefit programs make it possible for employers to help their existing employees acquire the educational and thinking skills they need to help their company in new roles. By focusing on helping employees grow, businesses can improve employee morale overall, earn greater employee loyalty across the board, and provide managers a clearer sense of the company’s mission.
With more benefit options for employees overall and with strong education-as-a-benefit programs, big companies like Walmart and Chipotle are making it increasingly difficult for small and medium-sized businesses (SMBs) to compete for employees. Seemingly gone are the days when an SMB’s smaller size and more flexible and personal work environment made it more attractive than the big chain alternative.
The good news is that SMBs can remain competitive by deploying their own education-as-a-benefit programs. Even better, the programs offered by SMBs don’t necessarily require the same employer investment or have to be as wide-ranging as the programs offered by larger companies.
Here are some defining parameters for the type of competitive education-as-a-benefit programs that SMBs can offer to become more competitive.
Both for attracting new employees and for building capacity with existing staff, providing education-as-a-benefit programs aimed at employees with only high school diplomas or some college credit will have the greatest impact. These employees have the greatest upside potential for employers, which means a better cost-to-benefit ratio. The skills mastered in just a few courses can increase the employee’s confidence and provide tangible application in their day-to-day work through better communication, writing skills, and critical thinking. In addition, employees without a degree will be able to take advantage of more options which can manifest into higher retention and increased company loyalty.
Provide education programs that help employees develop a broader set of general skills and competencies
Traditionally, companies have focused their employee training programs on narrow skills related to a specific job definition, such as Google Ads or Agile Project Management certifications. While such training affords employees valuable short-term benefits related to their current performance, it does not help them develop the much-needed broader competencies — both professional and thinking — that will boost their long-term potential for professional growth.
The new trend in employee education is shifting toward college degrees and/or college certificate programs, which help employees develop strong foundational thinking skills, as well as expertise in professional areas that are of mutual interest to the employer and employee. For SMBs, this new approach to education-as-a-benefit options should include an emphasis on associate degrees and specific clusters of college-credit courses, such as a Business Writing and Communication cluster consisting of English Composition I and Introduction to Communication. This strategy ensures that employees take courses or pursue degrees that will actually benefit them and the company, generally lowering the overall investment in the program.
SMBs don’t have to and in most cases shouldn’t offer the same types of education-as-a-benefit programs as large companies. Nor do SMBs necessarily need to provide equivalent subsidy options.
SMBs are small enough to work with education providers like TEL Education to craft programs to company and employee-specific strengths and needs. Such programs may include practical options such as subsidized associate degrees that support flexible scheduling, course clusters that provide high impact, and low-cost college certificate courses that will be accepted for college credit if an employee decides to pursue a degree at a later date. The focus for all courses in an SMB program should be on measurable learning tied to 21st-century skills and competencies, leading to stackable credentials and skills badges.
The benefits employees are looking for continue to change. A small, close-knit culture and a great atmosphere are great, but to stay competitive, small and medium-sized businesses need to look for other ways to attract and retain their good employees.
If you are interested in learning more about how to build a program that meets the needs of both your company and your employees, reach out to TEL Education to learn more about our partnerships.