Walmart announced this week that it will pay for its employees to earn bachelor’s or associate’s degrees through online programs offered by the University of Florida, Brandman University in California, and Bellevue University in Nebraska. As The Atlantic explains, the benefit will cover tuition (after accounting for scholarships and other financial aid), textbooks, and other fees for programs in business or supply chain management. The benefit will extend to part-time, full-time, and salaried workers, who are required to work at Walmart for the duration of the program and pay a $1 daily copayment to Walmart.
In its analysis of the announcement, Vox notes that while “the benefit is real” and an opportunity for upward mobility, it is restrictive and “telling…on a number of levels.” Specifically, the approach reflects an improving economy where workers have more opportunities and choices, leading to greater turnover—already a struggle for Walmart, which has taken heat in recent years for insufficient wages and benefits.
As Vox notes, the tuition program has the potential to improve employee recruitment, productivity, and satisfaction with little tax burden for Walmart. And unlike an expensive across-the-board wage increase, tuition benefits tend to be “disproportionately appealing to people who are on the more ambitious end of the distribution,” allowing Walmart to target an especially productive segment of its workforce.
Reporting that Walmart has partnered with the Lumina Foundation to measure the efficacy and impact of its tuition benefit, The Atlantic points to positive results generated by other large companies’ tuition-benefit efforts. Health insurer Cigna, for instance, saw an eight percent reduction in turnover and significant talent-management cost savings—a 129 percent return on investment—across two years of its education-reimbursement program. Participating employees, meanwhile, saw a greater increase in wages compared with colleagues who did not participate in the program. Robert Kelchen, assistant professor for higher education at Seton Hall University, says that colleges also stand to benefit from partnerships with large employers. By prioritizing the skills employers desire, colleges can better help students “stay connected to higher education while working full-time,” Kelchen says.