Your guide to education benefits that grow your talent

Good education benefits transform business and talent outcomes.

Instead of simply being seen as a benefit, education is now a strategic investment in a company's talent strategy — and a competitive advantage.

Major employers like Walmart and Chipotle started the transformation years ago. Both companies were early innovators who saw that standard tuition reimbursement programs were not achieving their intended goals.

The programs were inequitable, saw low adoption rates, and ultimately proved ineffective.

In 2018, Walmart started an education program that helps pay for education through tuition assistance. The program allows associates to enroll in learning programs ranging from high school completion to degrees and certificates.

As they saw higher retention and promotion rates, the retailer kept investing in the program. In 2021, they made education available — completely tuition-free — to all 1.5 million employees.

Chipotle changed its tuition reimbursement program in 2016 to make it tuition-free. They found that crew members working there less than 6 months were 2.1x more likely to stay if they were enrolled in Guild programs (compared to crew members who were not enrolled)¹.

They’ve also seen a 46% increase in applicants when marketing education to prospective employees.²

Now, more and more companies are seizing the moment. Since 2021, companies like Target, Sunrun, Macy’s, and more have started new programs that help their workers learn new skills.

But to see the gains of this kind of program, organizations must structure them accordingly.

These next-generation education programs are driving outcomes. And they're taking an intentional approach to payment, policy, and learning options. This simple guide provides an outline to this intentional approach.

We’ll cover best practices for structuring an effective employee education benefit program, including how to rethink:

• Payment
• Policy
• Learning providers
• Bonus ways to set a program apart

The 3 key elements of an effective education program

Education programs that actually receive engagement and drive outcomes (such as talent acquisition and retention) have three fundamental elements:

• Proper payment structures
• Accessible policies
• A marketplace of high-quality learning providers

We'll dive into each.

1. Tuition Payment Method

The method of payment matters. Tuition reimbursement is often the basic payment option for education benefits. However, requiring employees to pay upfront creates a major barrier for many. This is a key reason why only 2% of employees are estimated to actually participate in tuition reimbursement benefits. 

As companies expand employee education to frontline workers, offering flexible payment options is crucial for promoting equity and access.

What’s the difference between “tuition reimbursement” and “tuition assistance”?

Tuition reimbursement programs require employees to pay for their courses upfront and apply for reimbursement after completion. 

Tuition assistance programs let employers cover some or all of an employee's tuition costs directly. In other words, this model effectively reduces or eliminates the need for employees to pay out of pocket.

What does “tuition-free” mean?

The best option is a fully funded tuition assistance model. Employers cover all education costs— including tuition, books, fees, and more  — so employees don’t pay out of pocket for any education-related expense.

Previous models of employee education fail to meet the needs of all workers.

Tuition reimbursement was designed primarily for corporate workers, who are more financially equipped to pay for school upfront while waiting for reimbursement.

Frontline employees often do not have that luxury.

Offering tuition assistance that eliminates the barrier of upfront tuition cost is the first step in opening access to education and supports professional development for your entire workforce. 

According to a Guild survey, 3 out of 4 employees who do not hold an undergraduate degree select tuition assistance over tuition reimbursement programs when their employers offer both funding options. This increases to 9 out of 10 for employees with no college experience.³ 

Providing program options that are directly funded by employers is essential to creating an equitable, effective program. Nearly 100% of Guild employer partners offer some form of tuition-free program to its workforce⁴, and more than 90% of Learning Marketplace learners incur no expenses from tuition, textbooks or fees.⁵

Streamlined, tuition assistance programs drive ROI

Programs following payment best practices see a higher return on investment in education, including better talent attraction, retention, and benefit adoption.

• Talent Attraction: In one example, 50% of surveyed applicants in a Waste Management hiring campaign cited their tuition-free college offering as a reason for applying.⁶
• Talent Retention: Guild learners in Learning Marketplace programs were 2.3x less likely to leave their employer in the last 12 months compared to non-members.⁷
• Benefit Adoption: 4 out of 5 healthcare employees with no college experience select tuition assistance programs when their employers offer both TA and TR funding options.⁸

Payment best practice recommendation

Remove financial barriers and offer a tuition assistance program that's easy for both employees and employers to use.

For companies still committed to also offering tuition reimbursement, beware of limited visibility into employee enrollment in programs and related reimbursement costs. It may be difficult to track:

• Completion and attrition rates
• Skill development and internal talent pipelines
• Alignment to business goals
• Job mobility
• Overall ROI

2. Education Benefit Policy

Policies like tuition clawbacks and grade requirements can discourage program adoption and create a negative employee experience.

Best-in-class programs should focus on policies that are both equitable and accessible.

An education benefit program is only effective when employees actually use it. That means policy needs to encourage adoption to have an impact on outcomes.

Policies like clawbacks and grade requirements often dissuade employees from participating in the first place.

Some of the most common examples to avoid include:

• Tuition clawbacks: Requiring employees to repay tuition benefits if they leave the company discourages participation.
• Manager approval: Employees may not always feel comfortable asking their manager. And, manager approval can introduce biases into your program.
• Grade requirements: Returning to school can be nerve-wracking for working adults. Many who have been out of school for years may be anxious about returning to school and find these policies discouraging.

The result of these outdated policies is that the employer sees no substantial gains from a program while the employee has a more negative experience — which detracts from the employer brand.

Best practice policy recommendation

Accessible and equitable policy supports an inclusive program.

Avoid outdated policies like tenure requirement, tuition clawbacks, grade requirements, or manager approval.

3. Marketplace of learning providers

A best-in-class education program serves the whole workforce — which means it should support diverse workers and match future skills and jobs.

Schools that have experience serving diverse groups can be particularly effective, such as HBCUs, Hispanic-serving institutions, or military-friendly schools.

Frontline workers have different backgrounds than their corporate counterparts, and educational programming should account for these different starting points.

For example, many employees would benefit from high school completion or language learning, while college prep courses can also be valuable for working adults who’ve been out of school for a number of years.

Associate, bachelor’s, and master’s degrees should be available as well.

Short-form learning has entered the new normal

In addition to foundational learning and degrees, businesses should consider skills-based, short-form learning, such as certificates, career diplomas, bootcamps, and beyond.

These programs can help workers build skills that align with the future of work while also promoting internal career mobility.

Best practice learning provider recommendation

Choose programs and providers that best serve a diverse workforce. Offer programs geared toward a variety of educational levels and needs. And include short-form learning programs as well.