There is sufficient evidence supporting that employers who make “repeated and diversified” investments in educational benefits experience higher worker-retention rates and productivity. Similar to “company-matched retirement funds,” employers who adopt an educational benefit model that engages employees to make upskilling investments throughout their careers have the potential to see significant improvements in their bottom-line.
Investments in Employee Ed Pay Off
In today’s economy, there is high-demand from low-wage workers for employer-assisted, accessible educational benefits. Programs such as ESL classes, high school completion, college tuition assistance and advising services can provide workers career exploration opportunities and learning experiences that translate into higher earnings. Moreover, there is sufficient evidence supporting that employers who make “repeated and diversified” investments in educational benefits experience higher worker-retention rates and productivity. Similar to “company-matched retirement funds,” employers who adopt an educational benefit model that engages employees to make upskilling investments throughout their careers have the potential to see significant improvements in their bottom-line.
Upskilling Demand & the Future of Work
- A pre-pandemic BCG report found that “more than 53 million people in the U.S. were working in roles to which their competencies were not aligned.”
- A 2016 Pew Research Center report found that “nearly 90 percent of workers believe that continual upskilling will be important or vital to maintaining a viable career.”
- An October 2020 World Economic report revealed that by 2025, employment lost to workplace automation will be replaced by “tens of millions” of new high-tech job openings.
- A study by the National Center for Women and Information Technology projected that 81% of “computer-relating” jobs could go “unfilled in 2028 based on the current rate of bachelor’s degree completions.”
Ultimately, learners and employers lack transparent information that would guide them in deciding which career pathways to invest in. There needs to be standard competency descriptions among industries and educators to simplify the labor market.
In addition, with many colleges and universities experiencing enrollment declines, they are in a unique position to enter into partnerships with employers and offer programs that feature “work-relevant competencies” Moreover, since the pandemic, there has been an increasingly growing effort to come up with a common language for defining such competencies.
- LinkedIn Learning’s 2019 Workplace Learning Report found of the employees they surveyed, 94% said that educational benefits would likely lead to them to stay at their company longer.
- An Urban Institute report referenced findings that more employee training led to productivity that outweighed increased wages.
- “According to calculations by Lumina Foundation and Guild Education, the ROI for [businesses] educating employees is between 129 and 185 percent”
- Restaurant chains like Taco Bell and Checkers found significant increases in employee retention as a result of educational benefits.
Despite the earnings potential for employers and employees, participation in educational benefits is low. A survey by Bright Horizons found that only 2% of American workers were using educational benefits offered to them. Two reasons low-wage workers do not participate are lack of career guidance supports and schedule flexibility to complete traditional educational programs.
McDonald’s Case Study
The McDonald’s Archways to Opportunity program, launched in 2015, offers ESL classes, high school completion, college tuition assistance and educational advising services. “By 2020, more than 60,000 McDonald’s employees had participated, and the program had awarded more than $125 million in tuition assistance.” To increase participation, McDonald’s in partnership with Strada Education affiliate Inside Track and Council for Adult and Experiential Learning, created a career-exploration app that provides interest assessments, skill gap analysis, and career pathway information. The app also connects workers with education advisors. The goal of the app is to provide a holistic advising and learning platform to engage employees into becoming active participants in educational benefits offered by their employer. Overall, according to a McDonald’s study with Accenture, “restaurant employees who make use of the Archways program are staying with the company more than twice as long as their nonparticipant colleagues. They also are more than twice as likely to be promoted.” Furthermore, the study found a “1.2 percent sales lift that statistically correlates with the Archways Program.”
Positive Overall Effects
Educational benefits that work for one company may not for another. However, there is a large amount of evidence supporting that employee education programs confer positive ROI for employers and employees across industries.