Big corporations are partnering with universities to help employees get their degrees.
March 22, 2019
In November 2018 Uber announced a surprising new partnership with Arizona State University. The global ride-hailing service will now offer access to a fully funded college degree for Uber Pro drivers — and their families. That means drivers who meet the criteria of driving a certain number of hours per month and receive top passenger ratings can complete a full undergraduate degree through ASU Online or take part in non-degree courses through ASU’s Continuing and Professional Education program. They can also provide this benefit to a partner, child, grandchild or other family member.
This initiative didn’t begin as an education program, said Ali Wiezbowski, Uber’s head of driver engagement. Early in 2018, Uber announced a new corporate mission to “ignite opportunities that put the world in motion.”
“We realized that if we were going to stand behind that mission, we needed to bring it to life for drivers,” Wiezbowski said. So her team spent weeks interviewing hundreds of drivers about why they drove and what they aspired to achieve from the experience. Throughout those interviews two themes emerged, she said. “They come to the platform to provide for their families or to build a foundation for their own future.”
Fully 50 percent of drivers reported that they planned to start a new business in the next five years, and many older or retired drivers were doing it to support their extended families. That led Uber to the idea of providing a college education and business training as a benefit to its most loyal team members. “It is a way for Uber to demonstrate its appreciation for drivers who are on the road every day and to make Uber the platform of choice,” Wiezbowski said. The program launched in eight cities, but they expect to roll it out nationwide this spring.
Beyond Tuition Reimbursement
Global corporations have supported employees pursuing secondary education for years. However, most of these programs have been built around tuition reimbursement for employees learning a relevant workplace skill or pursuing an MBA. And such reimbursement programs have been historically underused for a variety of reasons. Many companies don’t actively market them to employees or track the impact of the investment, and they often require employees to cover the cost of tuition up front and only reimburse them when the course is complete.
Collaborating directly with universities to offer a full degree with little or no up-front investment could turn the tuition reimbursement model on its head, said Robert Kelchen, assistant professor of higher education at Seton Hall University in South Orange, New Jersey. “It’s definitely a trend to watch,” he said. Paying for everything up front and providing employees with centralized, quality online education that can be completed in a more flexible environment could increase use of these programs and their benefit to employees and employers.
“It’s interesting to see the shift from companies partnering with local community colleges to large online academic institutions,” Kelchen said. It means employees will get the same quality of education no matter where they are based, and companies can negotiate tuition discounts. It can also lower in-house training costs, he said. “If you don’t have enough people to justify a full program, partnering with an academic institution may make sense.”
These collaborations also tend to target entry-level employees and focus more on their personal aspirations than job skills. “It’s more of a benefit than a training and development effort,” said Daniel Szpiro, dean of the school of professional programs at Marist College in Poughkeepsie, New York. “It is viewed as a tool to attract and retain talent and a PR move.” Indeed, when multinational corporations offer workers access to a free college education, it does win them a lot of publicity. Uber, Walmart, Starbucks and Ford have all garnered a lot of positive public attention for similar college funding initiatives.
But even if these programs are more of a benefit than a corporate learning strategy, they deliver significant value for employees and employers, said Haley Glover, strategy director for Lumina Foundation, a nonprofit organization in Indianapolis that focuses on making post-high school education more accessible. “We are in a hot economy and the skills gap is real,” she said. “Companies need to exercise all the tools in their toolbox to keep and attract talent, and one way is through education benefits.”
This can be especially impactful when those benefits target front-line hires. “We encourage companies to focus on these workers because that is where they will get the greatest returns,” Glover said. “That’s where talent management issues and risk of turnover are the highest, and it is a great opportunity to provide a benefit that they will value for a lifetime.”
Starbucks Leads the Way
Starbucks became the leader of this trend in 2014, when it launched its College Achievement Program — also in partnership with ASU. The program offers employees 100 percent tuition coverage for a bachelor’s degree at ASU Online with no requirements to stay with the company post-graduation.
Starbucks’ CEO Howard Schultz came up with the idea after meeting the head of ASU at a conference on solving 21st century problems, explained Phil Regier, dean of educational initiatives and head of ASU Online. At the time, 70 percent of the coffee chain’s employees had no college degree, and Schultz wanted to help them close that gap. “Howard’s vision for the company has always been about creating amazing interactions between customers and baristas,” Regier said. Providing these customer-facing employees with a free education is one more way to create an environment where they are happy to come to work. “It was groundbreaking,” Regier said. “No one had done anything like this to scale before.”
And it has had the desired result. Thousands of employees have now gone through the program, including 8,600 in 2018 alone, and retention of these students is higher than the general population of ASU Online students, Regier said. Even though employees don’t have to stay with Starbucks after they graduate, the company has seen higher retention among these employees, and they are three times more likely to be promoted, according to Regier. “Through this program, Starbucks is creating conscious capital that benefits employees, customers and the business,” he said.
However, industry experts warn that these programs can just as easily flop if they are not carefully managed and marketed. Kelchen noted that graduation rates among online universities are historically low — roughly 55 percent for first-time full-time students and 39 percent for first-time part-time students, according to the Department of Education.
Going to school while working can be overwhelming, and the lack of college community and support structure can make it difficult to complete, Regier said. However, many nonprofit academic institutions now cater to these nontraditional students to try and address the issues that cause high drop-out rates. This can help corporations interested in providing college degrees to employees achieve a higher rate of success.
Nontraditional Students Need a Different Approach
In May 2018 Walmart announced a partnership with Guild Education to offer employees access to online courses to complete their high school degrees or pursue an associate or bachelor’s degree in business or supply chain management. It will eventually be made available to all Walmart U.S. and Sam’s Club employees, and they only pay $1 a day to participate. “Our research found that when people have an investment in their education they are more likely to complete it,” said Michelle Malashock, head of media relations for Walmart.
Guild works with Fortune 1000 companies to create academic programs that give employees access to advanced education through a number of nonprofit universities. One of the reasons Walmart chose Guild is because it caters to nontraditional adult students. “Our number one goal is helping employees complete their degrees,” Malashock said. Along with providing access to courses, Guild helps students figure out how to secure college credit for past schooling and company training, and they provide coaching on how to apply, choose courses and stay enrolled.
“The needs of nontraditional students are very different from those coming straight from high school,” said Gary Brahm, chancellor of Brandman University, one of the institutions participating in the Walmart program through Guild. Brandman, which is part of Chapman University, focuses solely on nontraditional student populations. “Many of them are first-generation citizens, low income, and they don’t have experience choosing a college or picking courses,” Brahm said.
To ease the transition to college, Brandman uses a competency-based approach in which students complete courses at their “pace of learning” rather than following a structured semester format. “Once they master a skill, they move on,” Brahm said. This prevents learners from getting overwhelmed and allows those with existing skills to prove what they know and move on. “It gives them a sense of confidence, and it makes every credit count.”
As part of the partnership, Brandman has worked closely with Walmart Academy to understand how its courses can translate to college credits and to incorporate Walmart-relevant case studies into some of the business and supply chain management courses.
While Malashock acknowledged that the program is definitely a perk, Walmart also sees it as a learning and development opportunity that will empower employees to deliver better service while advancing their careers. “A bachelor’s degree might not be relevant for a cashier’s job, but that cashier might be our next CEO,” she said. “This program gives them the opportunity to take that journey.”
Make it Easy
Walmart and Uber are still too early in their programs to have measurable results, but both are optimistic that they will be viewed as an attractive benefit and learning opportunity for employees and their managers.
“It’s an extraordinary thing for a corporation to do for its employees,” Regier said. “They can get a free degree while earning an income, and they will become better employees in the process.” He urges companies to be thoughtful about the academic partners they choose and how they manage and market these investments, however. “A university education is hard to start, and it’s hard to stay with,” Regier said. Making it easy for employees to apply and providing them with the guidance they need to stay engaged could be the difference between a groundbreaking academic program that attracts and retain talent and a PR stunt that quickly gets forgotten.