At this time of the pandemic, where the economy and businesses experience economic adjustments, employer-based college programs by companies rise to benefit employers and employees mutually. These programs can lead to high retention rates, enhanced work skills, improved morale, and increased business/company productivity. Employer investment in employee’s higher education is, therefore, countercyclical, presents a clear ROI, and economically rewarding.
However, due to company layoff, establishment closure, and recession to reduce expenses, people utilize the opportunity to hone their skills through education and skill enhancement. It is a blessing for the employee to be developed through corporate, educational opportunities, with minimal costs and less stress than companies that delegate ‘self-education’ to employees.
Yet, some agencies cut back their contributions during ‘tough times’ on their employees’ education to reduce overall expenses, as stated by Mary Alice McCarthy, director of New America.
Additionally, forty-three percent (43%) of companies resorted to employee skill upgrade as of July 2020. More than 80% of learning and development leaders in May 2020 expected an increased expense on education within 12 to 18 months. Sixty-six percent (66%) perceived investment in education as a strategic and intellectual organizational move.
Companies double up their efforts on education investment to keep up with the global competition for skills, credentials, and competitiveness in a dynamic market and economy, according to research by the US Chamber of Commerce Foundation. Companies will attract employees that are retainable, growth-inducing, and productive to their businesses.
When accelerated digitization and technology, coupled with scarcity in technical talent, are the norms of advancement, business owners rethink this perception and capitalize on providing employer-based college programs. Business owners become forward-thinkers and double down education investment. Examples of companies include:
- Chipotle – pay directly for its employees for a debt-free college program under Guild Education (which allows enrollment in more than 75 online programs with specific colleges) and even including Paul Quinn College as one of the college partners; to date, more than 8,000 employees availed of the educational program
- Walmart opens healthcare supercenters with 4,000 stores across the US, in partnership with Penn Foster school, to train optician and pharmacy technician roles.
- Fiat Chrysler Automobiles US (FCA) – teams up with Strayer University to provide tuition-free college programs
- Noodle Partners – partners with Strayer University to deliver relevant employee education programs
- US Chamber of Commerce and Federal Reserve Bank of Atlanta – collaborates with Talent Finance to invest in a skills plan for their employees.
- Amazon – ties up with Career Choice to prepay tuition for its employees’ upskilling program.
- Disney – teams up with Guild Education and prepays tuition for its employees.
Advantages of providing employer-based college programs for the employees include:
- Increased employee retention rates (three and a half times higher) than replacement rates and career shifts.
- Cost-effective educational investment because less than 5% of employees avails the program, according to SHRM.
- Increased employee participation, productivity, and turnover, according to the Graduate! Network survey (2016-2017)
- Development of highly skilled, competitive internal employees through reskilling, rather than outsourcing talent
However, corporate education programs may encounter barriers to the implementation of the programs, such as:
- Programs that address both employer and employee needs
- Lengthy implementation of the programs
- Address employees’ worries about the program
- Increased maintenance costs for the program
- Increased demand for tuition reimbursement compared to the high expenses shouldered by ‘breadwinners.’
Overall, companies emphasize value on education and skill investment for their employees, outweighing its disadvantages over the advantage of high retention, improved productivity, employee-employer work satisfaction, and cost-effectiveness, the factors that are alleviating at this pandemic times.
Employers must develop corporate programs with well-understood platforms, employee-friendly, and skill-tailored courses, and adaptable to the changing technological advancements. A growing US economy needs education and skill-oriented employment relations for its development.