One of the recurring themes of the American economy this summer is the difficulty U.S. businesses have finding enough workers and the steps they have taken to attract applicants, ranging from higher pay and cash bonuses to programs that help employees complete their college educations.
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This latest perk has gained momentum in recent months, with major corporations rolling out tuition assistance and similar programs to help them overcome labor challenges.
Amazon announced that it will reimburse up to 95% of tuition and fees for eligible employees, CNBC reported on Thursday. Starbucks, UPS, Home Depot, FedEx and Chipotle have similar programs to help workers pay for college. Waste Management has taken things a step further by not only paying for college degrees and professional certificates for employees but also offering the same benefit to their spouses and children.
And as previously reported on GOBankingRates, retail giants Target and Walmart both recently unveiled tuition reimbursement programs to help employees handle the cost of heading back to school.
One reason tuition assistance is so appealing to workers is that many had to delay their higher education plans during the pandemic, as many schools either suspended operations or drastically reduced the number of students they could serve. With the pandemic easing in recent months — at least until the Delta variant arrived — many students have decided to resume their educations.
Free or discounted higher education helps companies bolster their recruitment efforts while also improving the wellbeing and career prospects of their employees.
As CNBC noted, research shows there are substantial differences in lifetime earnings by education level. Men with bachelor’s degrees earn about $900,000 more over the course of a career than high school graduates. Women with bachelor’s degrees earn $630,000 more, according to the Social Security Administration.
Many companies are now extending educational benefits to front-line workers such as cashiers, drivers and hourly employees.
“It is an underrated benefit and probably underutilized benefit,” Willis Towers Watson senior director Lydia Jilek told CNBC, adding that educational benefits are a cost-effective way to find and keep workers. “If someone can get a bachelor’s degree for no cost, that is likely to increase their loyalty to their employer.”
There’s plenty of proof to support that claim. Chipotle chief financial officer Jack Hartung told CNBC in April that employees who take advantage of his company’s free degrees are 3½ times more likely to stick around and seven times more likely to advance into management positions.
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Meanwhile, modern technology makes it a lot easier to get a college education than it used to be.
“With the increased opportunity for distance learning, people can enroll in a program online perhaps that they haven’t been able to do in the past,” Jilek said.
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