Employer-Based College Programs Here to Stay

Companies like Chipotle and Amazon aren't scaling back educational benefits for employees.

November 5, 2020
 
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Employer-based tuition reimbursement or debt-free college programs can be effective ways to retain workers and attract new ones.

But they're also an employee benefit. And benefits are one of the first things on the chopping block when times get tough, said Mary Alice McCarthy, director of the Center on Education and Skills at the left-of-center think tank New America.

It's surprising to McCarthy, then, that several companies with prominent education programs have no plans to scale them back. And, in some cases, companies are actually expanding programs' reach.

"Normally during a downturn, some of the first things to go are training programs, like tuition reimbursement programs," she said. "I wonder if those companies are trying to hold on to workers."

Fast food restaurant Chipotle offers tuition costs up front for its employees through its partnership with Guild Education. Workers can enroll in one of more than 75 online programs at specific colleges, such as Colorado State University, Southern New Hampshire University and the University of Arizona. Normally, workers have to meet hourly work requirements to take advantage of this program. But, in the spring, the company didn't enforce that requirement due to the widespread shelter-in-place orders and shutdowns, according to Erin Wolford, senior director of external communications at the company.

"Chipotle recognized that some individuals may be unable to work during that time and wanted to ensure that its employees could further their education with continued financial assistance from the company," she said.

Chipotle announced in October that it's also expanding its debt-free college program to include Paul Quinn College, a historically Black college. Employees who choose to attend Paul Quinn will still have their tuition covered up front.

“We want to provide employees with the tools to achieve their full potential and recognize that financial barriers can be one of the biggest obstacles for not furthering their education,” Marissa Andrada, chief diversity, inclusion and people officer at Chipotle, said in a news release. “Ensuring we provide inclusive benefits and a support system for our employees and recognizing the importance of offering an HBCU in our education program will continue to aid in our efforts to cultivate a better world.”

More than 8,000 Chipotle employees have used the education benefit since it was first offered in 2016, most of them crew members. The retention rate for employees using this program is three and a half times higher than for those who don't.

This is the main reason McCarthy believes companies are doubling down on tuition reimbursement programs. Businesses likely want to hit the ground running once things return to normal, and retaining employees who are already trained in the job is the best way to do that.

"These programs are much more an employee recruitment and retention program rather than they are an upskilling or training program," she said. "It’s a way of keeping in touch with all of those workers."

Other companies are maintaining their educational benefits as well. FedEx has no plans to restrict its program -- it's actually looking at expanding into more markets, according to Robbin Page, vice president of human resources.

Amazon announced in October that 30,000 of its employees have used its upskilling program, called Career Choice, that prepays tuition for programs aligned with 20 different careers across 85 higher education institutions.

“Career Choice is one way we help people think big about their careers, and we offer training across a wide variety of skills needed for high-demand fields,” Darcie Henry, vice president of global human resources, said in a news release. “We’re excited for the 30,000 people who have already participated in the program to continue contributing to their communities and creating better futures for their families. And we hope that number will continue to grow -- people hired today could be the Career Choice graduates of tomorrow.”

Shawn Hulsizer is seeing similar commitment and enthusiasm from the organizations she works with, which is why she isn't surprised to hear that.

Hulsizer is vice president of advancement and impact at the Council for Adult and Experiential Learning (CAEL), a Strada Education Network affiliate. The council often serves as an intermediary between employers and higher education institutions for these kinds of programs, she said.

The companies that work with them understand they have to make investments to retain and recruit employees, and that trend isn't changing, she said.

Hulsizer hasn't seen a scaling back of educational programs. One reason is they're relatively low cost. Generally, only 2 to 5 percent of the workforce at a company uses the tuition reimbursement program. Cutting it wouldn't save much money.

People may be looking for these benefits now more than ever, she said. While surveys show that many are interested in furthering their education since the COVID-19 pandemic began, affordability is still an issue.

"Even though they need education, they're cautious about pursuing it," Hulsizer said. Tuition reimbursement programs can help solve that problem.

Potential students face other barriers, though. Hulsizer is most worried about low-income workers and people of color, who have been disproportionately affected by the pandemic. Even if they have a benefit from an employer, will they have the time, access, childcare and prior educational attainment to be able to pursue more education?

The recession is also a factor. The Orlando Sentinel reported on Disney's layoffs and how that affected workers in its program, called Disney Aspire. Disney also works with Guild Education to prepay tuition for employees at certain institutions. While the program itself hasn't been downsized, participating employees who were laid off lost their path to an education.

"While the pandemic has challenged our business and our workforce in immeasurable ways, the Disney Aspire initiative remains important to us," the company said in a statement to Inside Higher Ed. "Together with Guild Education, we are working to offer impacted participants options they can explore if they wish to continue their educational pursuits, including discounted Guild tuition rates and transfer opportunities. Disney Aspire will continue to be available to our eligible employees, including those who are on furlough."

Hulsizer hadn't encountered this problem in her work, and she said she mostly sees employers committing to their investments in learning and trying to help employees navigate their resources.

"We hope these programs don’t get touched, and we don’t see any signs that they will," she said.

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