Typically, employers scale back benefits amid an economic downturn, but so far, the pandemic does not seem to be dampening companies’ commitment to debt-free college programs and tuition reimbursement offerings for their employees. Companies like FedEx, Amazon, and fast-food restaurant Chipotle are maintaining, and even expanding, their educational benefits for employees in an effort to retain and recruit workers.
“Normally during a downturn, some of the first things to go are training programs, like tuition reimbursement programs,” Mary Alice McCarthy, director of the Center on Education and Skills at New America, tells Inside Higher Ed.
A win-win benefit program
Instead, Chipotle is continuing its debt-free college program in partnership with Guild Education, which allows workers to choose from more than 75 online programs at selected institutions like the University of Arizona and Colorado State University. The fast-food company recently expanded its program to include Paul Quinn College, a historically Black institution, and opened the tuition benefit to all employees, suspending the hourly work requirements previously needed to qualify for the program.
“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,” says Marissa Andrada, chief diversity, inclusion, and people officer at Chipotle.
McCarthy points out that tuition reimbursement programs also benefit employers, by boosting employee retention. Workers who participate in Chipotle’s program, for instance, are more than three times more likely to continue working at Chipotle than those who don’t.
Enticement for students taking a ‘gap year’
Employers’ unwavering enthusiasm for tuition-benefit programs also reflects their interest in attracting recent high school graduates, whose next steps have shifted amid the precariousness of the pandemic. According to Casey Welch, CEO of Tallo, a platform that helps Generation Z students with postsecondary opportunities, more students are looking at jumping into the workforce.
“They’re saying, ‘I’m taking a year off and getting experience at a Fortune 500 company,’” Welch told the Society for Human Resource Management (SHRM), adding that many are considering applying for jobs at organizations like Walmart, McDonald’s, and Chick-fil-A, which offer tuition reimbursement.
Employers recognize the growing appetite for a more affordable path to a degree, says Shawn Hulsizer, vice president of advancement and impact at the Council for Adult and Experiential Learning (CAEL), which serves as a liaison between postsecondary institutions and employers. “Even though [workers] need education, they’re cautious about pursuing it,” she says.
Other forces could limit impact
Hulsizer adds that she is concerned that low-income workers and people of color will not be able to take advantage of available tuition assistance as they bear the brunt of the pandemic, often sacrificing their education for the sake of other priorities.
Layoffs also pose a threat, separating workers from their tuition benefits before they can complete their credential. Layoffs at Disney, for example, affected employees participating in the company’s tuition assistance program with Guild Education. In response, Disney coordinated efforts to help those affected continue their education by offering discounted Guild tuition rates and transfer opportunities.
Hulsizer remains optimistic that companies will continue to see the value in maintaining these programs, which ultimately invest in workers’ futures: “We hope these programs don’t get touched, and we don’t see any signs that they will.”