For years, organizations have established tuition reimbursement benefits to attract potential new hires, but generally put them on the shelf and forgot they existed. Traditionally these policies were designed to meet a $5,250 per person, per year allowable tax benefit deduction and covered only post-secondary education expenses.
The benefit was used to show stakeholders and industry competition that the company was a good corporate citizen, even using the benefit in campaigns to get onto “Top 100” lists, but the desire for actual employee utilization is very low and often deterred. Still, other organizations have turned their back on an education benefit all together, thinking investing anything in individuals that turn over at such a high rate is a waste if they never show up for a second shift.
Most companies who have adopted this approach have seen low benefit participation rates, and worse, fail to articulate the value of such benefit to senior leadership. With the right toolkit leveraging insightful questions, organizations can shift their thinking on education assistance as a powerful tool in attracting, developing, training and retaining employees.
Here’s what we found
Both scenarios above are missing several key components such as: strategy and unification of cross-business stakeholders to drive a meaningful discussion related to talent management; design thinking around educational programs and solutions that can impact job and career development; the right technology and support to capture data analytics related to performance and business impact of these benefits; and ultimately, widening the lens of who your workforce is.
We’ve met many companies who keep similar philosophies; not because they’re meaning to, but because they don’t understand the underlying strategy or cost to the organization. These lackluster views about talent development aren’t keeping up with the pace of change, in an economy where nontraditional competitors are now attracting your talent and, where employee resignation or quits have risen steadily by the millions since 2010 due to lack of development opportunities.
Total employee quits per year. Source: U.S. Bureau of Labor Statistics
Here’s why we did it
Leveraging our collective years of experience in working with employers to design, develop, deliver and manage learning and education programs for companies, we partnered with Jaime Fall and UpSkill America as a way for us to share our insights broadly with the marketplace. UpSkill America, in partnership with the Walmart Foundation, has built a toolkit for organizations to use in designing sustainable upskilling strategies and solutions.
This tool is the latest in a series released by UpSkill America in the past year to equip businesses with the tools to educate, train, and support frontline workers’ development to advance their careers. The work builds on UpSkill America’s 2017 UpSkilling Playbook for Employers.
The U.S. is experiencing historically low levels of unemployment. As a result, learning and development (L&D), talent management and human resource (HR) thought leaders are declaring that the war for talent is over. Talent has prevailed.
Even with historically low unemployment, consider this:
There are an estimated 6.6 million jobs currently going unfilled in the U.S.
There are over 70 million individuals in the U.S. with either some college education but no degree, or without a high school diploma
These same individuals currently work in jobs with a high likelihood of being impacted by automation
By 2020, 65 percent of all jobs will require some form of post-secondary education and training beyond high school
This doesn’t sound like either side won.
To prevent another declaration of war for talent, L&D must create a new compact for talent. We need to strike a grand bargain with our employees and offer them a new deal.
Ed Baldwin, an HR strategist, suggests doing away with the concept of “at-will” employment and striking a compact that is worthy of reciprocation for both employee and employer. Additionally, Evan Hackle, CEO of a leading training development company, believes that we must provide career planning for every employee and transparency to where they stand in the talent pipeline.
With all of this as a back drop, I would like to propose that there is a new compact to be had with talent, and as L&D leaders, it is within our grasp to strike this grand bargain. This new deal for talent requires L&D to deliver on three main points.
1. We will ensure you have the skills you need to succeed in your role.
Now, for many of us, this may feel like what we are already doing. We provide what we think is role-specific training or tools to our employees to help them be successful in their current job, but in many industries, like hospitality, retail or quick service restaurants, the lack of foundational skills, literacy, numeracy, and even fluency in English, is holding workers back from achieving their potential.
As a learning and talent leader, we often lament when our front line does not take the programs we push out. But what if the obstacle to taking these programs is a language barrier or not having the personal technology devices or Wi-Fi to assist them in consuming these courses? Research shows 30 percent of the workforce falls into this latter bucket.
Forward-thinking organizations like Brinker International have recognized this. In January of this year, the parent company for Chili’s and Maggiano’s launched an innovative, voluntary employee education benefit Best You EDU™ to all hourly and salaried team members that begins with foundational education all the way to college.
2. We will invest in the development of your skills to advance your career.
Imagine being told you had $3,000, $4,000, or $6,000 a year that you could spend on developing your skills and advancing to your next role. How would you spend it?
As I talk to learning and talent leaders across a wide spectrum of companies, and we talk about the cost of turnover especially in front line worker roles, replacement costs can equal $2,000-4,000 a year for roles making on average $10/hour.
What if we flipped the model and instead of accepting this as the “cost of doing business,” we focus it on developing the employee for their next role – inside or outside of the company. For each year you stay in your role and have satisfactory performance, we will invest the value of turnover that year into your personal development. Talk about worthy reciprocity.
The Amazon Career Choice program is an example of this type of approach. Amazon invests up to $3,000 per year, up to a total of $12,000, for warehouse workers to reskill to their next role – largely outside of Amazon – for jobs in high-growth areas such as health care, technology and the skilled trades.
Imagine a world in which companies with programs like Career Choice are connecting their talent ecosystem to companies that are looking for that particular skill set, seamlessly moving talent from one organization to the next.
3. We will provide you with the tools and resources to determine how to invest in your skills.
How do we trust individuals will make smart investments in their skills development? This new deal is about providing tools and resources to help them make those investments. In my view, this is about career advising, academic advising and success coaching.
It may seem foreign to think about these types of services or roles in the context of your traditional talent management team. But giving your employees the resources and tools to plan their career requires these types of roles. The traditional back-office educational assistance program is not providing this level of support or strategic alignment to your talent strategy.
This means moving away from the fallacy that our managers are effective at guiding career planning conversations. Sure, they can conduct performance reviews, but most managers have limited capacity, few tools at their discretion, and minimal training in guiding an effective career planning conversation.
Success coaching is important to front line workers who are returning to learning for the first time. Success coaching is there to monitor and support the employee through their learning experiences. This should be required of every educational provider the organization works with – or a service provided by a third party.
A great example of this is an insurance company located in the Midwest. As part of its talent management organization, they have individuals who help coach internal candidates through their talent management process – from understanding a job posting, to preparing a resume, to submitting the resume to the hiring manager, to prepping for the interview. Their commitment to helping their employees understand internal talent mobility is a defining part of what it means to be an employee for that company.
Many will say “This is not possible. This would be too expensive to fund. I could never get this approved.” Yes, this is a departure from the norm, but consider the following:
Several studies by the Lumina Foundation have shown a return on investment (ROI) for up to 140 percent for organizations that strategically use their educational assistance programs. What learning programs do you currently offer that show that level of ROI to the organization? If you could demonstrate that level of ROI to your CEO and CFO, what would their reaction be?
Turnover of employees is a major cost to organizations and a drain on an organization’s results and resources. What if you could reduce turnover by 20 percent in your organization? What is the value of that reduction, not only in turnover cost, but also in increased productivity, revenues and customer satisfaction?
A Starting Point
As learning and talent leaders, this new deal starts when we prioritize workforce development. It starts when we move programs, like tuition assistance, out of being a benefit and into being a strategic tool for investment. It starts when we begin to look at our educational assistance policies and begin to customize them to the workforce. It starts with equipping your employees to make good decisions about how they develop their skills and invest in their development. It starts with removing the roadblocks your employees have in order to utilize these programs.
According to Gallup’s 2017 State of the American Workplace Report, 33 percent of the workforce is actively engaged and fully productive. That means that 67 percent of our workforce is looking for a new deal – better opportunities for development, opportunities for advancement, opportunities to be the best version of themselves. Gallup estimates that for every $10,000 in salary, a disengaged employee cost the company $3,400 per year. As learning and talent leaders, the business case is ours to make. The impacts are ours to make. This grand bargain is within our reach.
It is time for L&D professionals to strike a new deal with talent – a deal that is good for organizations, employees, and for the communities in which the business operates. A deal that is truly worthy of reciprocity.