Setting up clear, defined career pathways helps employees map out the skills and training they need to move up to certain roles and functions. (Photo: Shutterstock)
Amidst a grave labor crunch and a pandemic that is continuing through its second year, many workers, burned by the lack of support and stability from their previous workplace, have quit their jobs and are considering entire career changes. This "great reassessment of work," as it is called, is compelling many companies to offer incentives that attract new talent, keep existing employees and ensure all parties feel motivated to work.
Fortunately, education programs are recognized drivers of retention and employee engagement. When workers enroll in a training program and see a path to advancement, they are more likely to stay. Citing a 2011 Deloitte survey, the Aspen Institute calculated that 54% of employees ranked "opportunities for promotion/job advancement" as a more important retention incentive than compensation and bonuses. More recently, a September Gallup survey found that almost half of workers (48%) would switch to a new job if it offered skills training opportunities.
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Keeping workers engaged with education benefits addresses many key business challenges but implementing such a program isn't straightforward. With careful thought, the right design and robust investment, however, an employer education program can help close the skills and talent gap for employers and create meaningful career mobility for employees.
Education benefits engage and retain employees
In a July 2021 poll, the consulting firm West Monroe found that among C-level executives, hiring and retention were considered the top threats to U.S. businesses. Meanwhile, finding ways to keep employees engaged will only get more difficult as companies adjust to new office accommodations.
Offering educational assistance can boost retention. In 2019, Chipotle expanded its educational program to debt-free college degrees. According to its chairman and CEO Brian Niccol, the company's retention rate is 3.5x higher among employees participating in its program compared to those who are not.
Retaining existing employees doesn't just save time and money. A workforce that is motivated, committed and enthusiastic is good for morale, strengthens productivity, boosts company branding and improves an employer's ability to attract new talent. It is no wonder why education programs have long been remanded to Compensation and Benefits teams as part of the "Total Rewards" for employees.
"Getting this opportunity, it's a really cool thing," said Victoria Torales, a Chipotle employee who is studying for a Bachelor of Science in Human Resource Management at Wilmington University. "I am very excited. The fact that I want to work around people more, it's just exciting to know… It's something to look forward to."
Encouraging enrollment by designing with intent
Simply offering education benefits and hoping for the best, however, is not enough to keep workers satisfied. When companies offer no direction on programs and schools, employees often end up taking coursework from for-profit institutions or traditional state universities that aren't geared towards adult working learners. In other cases, they can become frustrated with the lack of direction or small payoff of the benefit and quit the program altogether.
Setting up clear, defined career pathways, however, helps employees map out the skills and training they need to move up to certain roles and functions. Such opportunities for mobility can keep workers focused and motivated. For example, Walmart enabled numerous credentialed programs in supply chain management and health care to align with its corporate business development in online shopping and health and wellness services. Chipotle's investment in programs for agriculture and culinary services is intended to shore up its talent needs for the future. Programs like these, which market pathways to working learners and attract their interests, take out the guesswork that often deters employees.
What kind of payment model to employ is another program design feature to consider. If employers offer education programs through tuition reimbursement, for example, it can negatively impact workers. When the average employee is expected to pay for tuition and fees first, they accrue $5 in debt for every $1 of reimbursement, and fewer than 20% of those employees earn a degree within six years. It is crucial then that upskilling and training programs are designed thoughtfully and thoroughly to maximize their value from both employees and employers. Through tailoring funding policies to match employers reskilling needs, incentives are created to build the right kind of talent pipeline to meet company strategy for the future.
A powerful tool
According to the aforementioned Gallup survey, "Upskilling is becoming a sought-after employee benefit and powerful attraction tool for employers amid the current labor shortage." Many innovative companies, including Walmart, Target and Chipotle, have taken the lead and offer a wide breadth of education services to their employees, especially focusing on frontline workers. In a recent press release about its own education program, Amazon called career progression the "new minimum wage."
From offering traditional postsecondary degrees to short-form credentialing and diploma programs, employers can empower workers to take charge of their education and careers. Through this approach, companies not only improve their own workforce, but also reinforce their internal pipelines with a pool of talent filled with people who are adept, eager and driven.
Matthew Daniel is a principal with Guild Education, helping to shape the company's approach to talent development and solving business challenges.
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