The policy barriers holding your education benefit back from its full potential
Education benefit policies that anticipate and remove barriers to access enable all workers, and their organizations, to thrive.
Despite news about a cooling labor market and slowing quit rates, many employers continue to face challenges in attracting and retaining a strong frontline workforce
Frontline workers in retail are 1.2x more likely to want to leave their jobs than the average U.S. employee. Leisure and hospitality boasts the highest quit rates across industries, and the food services industry isn’t far behind. In manufacturing, 75% of executives say attracting, retaining, and engaging a quality workforce is their primary business challenge.
To attract and keep the talent they need, particularly frontline talent, employers are continuing to invest in their employer value propositions (EVP), particularly around career development — the lack of which is the top reason frontline employees want to leave their jobs in 2023 according to McKinsey.
Education benefits can enhance EVP and mobility — but only when built for access
One way to do that is through a robust education benefits program, which can significantly enhance an employer’s value proposition by helping fuel career development.
However, many organizations inadvertently impose policy barriers that limit the effectiveness of these benefits — and can even add additional administrative burden for HR.
Companies that see the biggest gains from these programs go the extra mile to structure the benefit with generous policies that foster access, choice, and quality — which makes a big difference for frontline workers in particular. When employees feel encouraged and empowered to pursue education, they’re more likely to engage and grow — helping companies realize the benefits of improved retention and mobility into high-demand roles.
There are five common policies that can get in the way of maximizing your benefit.
1. Tenure requirements: The case for immediate eligibility
Many companies with large frontline populations grapple with short-term employee retention: 31% of employee turnover happens in the first six months. Traditional education benefits often entail tenure requirements, which set a minimum amount of time an employee must work before they are eligible for the benefit.
But the sooner employees can utilize these benefits, the more likely they are to remain with the company and even progress within it. Guild research has found that on average, new hires are 2.6x less likely to leave in their first 12 months if they enroll in a program1. What’s more, employees who simply engage with the benefit by creating an account and exploring their options are 1.8x less likely to leave, at no cost to the employer1.
A best-in-class policy would eliminate tenure requirements altogether, allowing employees to benefit from education programs from day one. But even if you set some limits, remember that the sooner employees are eligible, the sooner you’ll see improved retention and other program benefits such as internal career growth.
2. Performance requirements: Encourage continuous learning by removing barriers to success
For many working adults, particularly those in frontline roles, returning to a formal learning environment is a tall order. Many have been out of school for years, and come from a variety of backgrounds with different responsibilities that make it difficult to return to school, let alone hit a certain GPA.
Consider the demographics of employees enrolled in education benefits through Guild’s Learning Marketplace, which skew toward the frontline workforce:
- 66% have no prior degree beyond high school
- 19% identify English as a second language
- 71% are first generation college students
- 41% work > 40 hours a week
- 58% have caregiver or childcare responsibilities
Imposing strict performance requirements, such as maintaining a minimum GPA or achieving certain performance ratings, can be enough to discourage individuals from enrolling in the first place.
Removing performance-based eligibility criteria as a policy in your education benefit creates a more supportive and inclusive learning environment. By focusing on access rather than performance, employers can make the benefit more compelling to both existing and prospective employees.
3. Tuition clawbacks: Reduce financial risk for employees and brand risk for employers
Like performance requirements, clawback provisions — which require employees to repay tuition if they do not meet specific criteria — are a significant deterrent to participation in education benefits programs.
Many employees, particularly those who cannot afford to pay tuition upfront, see these provisions as a substantial financial risk. If they run into any personal roadblocks that hinder their success in the program, they’re on the hook for tuition they might not be able to afford.
Clawbacks can have negative consequences for employers as well. Collecting tuition is an onerous and time-consuming administrative task with significant brand risk — and it’s often unlikely that they’ll recover the full tuition at all.
4. Tax gross-ups: Make the program more affordable by covering unexpected costs
Cost is the biggest barrier to entry for frontline employees, and that can include the sometimes unexpected tax implications of tuition assistance. Current tax laws allow up to $5,250 of employer-provided education assistance to be tax free, but any amount beyond this is taxable.
Given that 46% of households can't cover a surprise $400 expense, implementing tax gross-ups allows employers to ease the cost burden on employees by covering any additional taxes.
This extra tax can be a surprise to employees, and employers. By getting into the details to make a smoother —and more affordable— experience, companies can encourage not just a better employee experience, but higher enrollment and completion rates as well.
5. Program selection: Align with strategic needs of the business while enabling employee choice and growth
Employers that see outcomes from education benefits have aligned programs with company strategy, fostering employee growth into high-demand roles within the organization. Research from The Josh Bersin Company bears this out, finding that “creating extensive opportunities for growth” is the #1 L&D drive of business, talent, and innovation outcomes — yet only 1 in 12 organizations actively move employees into high-demand roles.
But employers should also think about the range, format, and quality of the programs. Well-curated offerings are tailored to business needs but broad enough to meet employees where they are in their educational journeys and enable career growth at any stage.
Best-in-class education benefits encompass:
- Foundational learning such as high school completion or English language learning that can provide a useful stepping stone for many frontline workers
- Short-form offerings and stackable credentials that build valuable skills in the short term while “stacking” to higher level credentials over time
- Bachelor’s and master’s degrees, which carry substantial economic and practical value
Each offering in an education benefit catalog should also be vetted for quality — such as completion and job placement rates — and proven ability to build practical skills.
The right policies remove barriers to maximize program value
Education benefits can be a powerful lever in an organization’s talent strategy. When done right, they can create an attractive employer value proposition that brings in, engages, and keeps top talent while mobilizing that talent into high-demand roles.
This can be particularly relevant as organizations look to reskill workers for AI. Only 14% of frontline workers say they’ve received AI-related training, compared to 44% of leaders. Workers at every level stand to benefit from the technology — if the frontline can upskill for AI, they can be more productive in their roles or move into new positions entirely. They just need access to that training.
Policies that anticipate and remove barriers to promote that access to education benefits enable all workers to thrive — and their organizations, too.
Footnotes
- Guild’s internal data over the last 12 months as of 01/01/2024 from employers who have provided the required data for at least 13 months post launch