Companies using free education to attract and keep workers amidst war for talent – CNBC

A company advertises a help wanted sign on April 09, 2021 in Pawtucket, Rhode Island.

Spencer Platt | Getty Images

Higher pay, signing bonuses, and hybrid work schedules are just some of the incentives companies are using to attract and keep workers as the economy continues to reopen and consumer demand soars.

Now some businesses are going a step further by offering free education in a bid to get the talent they need.

Last month, Waste Management announced that it will not only pay for college degrees and professional certificates for employees, but starting in January will offer this same benefit to their spouses and children through a collaboration with edtech platform Guild Education. Chipotle began offering debt-free degrees to its workers in 2019, but in April expanded the program to 10 colleges and 100 different degree programs including those in agriculture, culinary, and hospitality, also in partnership with Guild. The moves come as surveys show that nearly 30% of hospitality workers are looking to leave the industry and find jobs in other fields as a result of the upheaval from the pandemic.

“The war for talent is so fierce that compensation can’t be the only differentiator between us and another company,” says Tamla Oates-Forney, Waste Management’s chief human resources officer. “We had to find a way to show that working for us goes beyond the paycheck.”

Despite the fact that about 9.6 million American workers are still counted as unemployed, the scramble for talent shows no signs of letting up.

“We keep hearing about the war for talent, but I would argue that the war is over and the talent has won,” says Steve Knox, vice president of global talent at human resources software company Ceridian. The dilemma is especially acute in fields with lower-wage jobs that don’t require a college education such as warehousing, restaurants, transportation, and hospitality. Combine this with a growing number of surveys showing that workers are increasingly thinking of switching jobs now that the worst of the pandemic appears to be over, and there’s little wonder why workers seem to have the upper hand.

Front-line workers getting new benefits

Companies paying for their employees to get a degree is not new, of course. For decades, businesses have picked up the tab for white collar workers’ graduate studies and MBAs. What’s different this time around is that companies are extending this benefit to front-line workers — such as drivers, cashiers, and hourly employees — who they desperately need to meet a sudden surge in demand as the economy gathers steam.

Chipotle chief financial officer Jack Hartung told CNBC in April that 85% of the employees who take advantage of the company’s free degrees are the folks who work in the restaurants. Further, they are 3.5 times more likely to stay with the company and 7 times more likely to move up into management, he says. “We see this as an investment in our people, and if they want to put the time and energy into learning then we want to put our investment dollars behind that learning,” he adds.

We keep hearing about the war for talent, but I would argue that the war is over and the talent has won.

Steve Knox, vice president of global talent, Ceridian

Education-as-a-benefit, as it is being called, reflects the priorities of workers, especially millennial and Gen Z employees, says Rachel Carlson, CEO and co-founder of Guild Education. “The top three things these employees are looking for are wages, health care, and learning and development opportunities,” she says. “They care about economic mobility; how do I move from that first wage to a second higher wage in a middle-class job.” Upskilling and reskilling have become the top incentives to keep workers who realize that they’re likely to switch jobs every few years and need their skills to stay relevant.

Guild is enabling that process by building out its platform so that customers like Waste Management, Chipotle, Walmart and Lowe’s can offer not only master’s, bachelor’s and associate’s degrees, but high school diplomas, management certificates and everything in between. The company has partnerships with eCornell, University of Florida, Southern New Hampshire University and Purdue Global University, among others. In September, the company added Paul Quinn College, its first HBCU, to its roster of college and university partners. Carlson says the most popular programs and degrees revolve around people management, process and project management, as well as English as a second language and high school diplomas.

Damian Frias, a commercial driver for Waste Management, is getting his high school diploma through the Guild platform. “I would tell my kids, ‘Get an education and be the best you can be.’ And sometimes they say, ‘Hey dad, you didn’t finish school,'” he says. “So now I can. I also want to get maybe an associate’s degree so I can go on and on with Waste Management.”

Working with Guild means there is no out-of-pocket expenses for employees who enroll in courses. That’s different than traditional education programs where employees laid out the money and then the company reimbursed them for the cost of the tuition. “The old model of tuition reimbursement was designed for wealthy headquarters workers who could afford to front the money,” Carlson says. “That’s just not the upskilling challenge of today’s economy and companies understand this.”