By Terry McDonough and Cheryl Oldham
For today’s professional, a full-time job and family commitments are often so time-consuming that earning a college degree is a daunting gamble. Questions of affordability, flexibility, and relevance dominate decision making—in short, will the degree be worth the investment?
Alleviating risk in one area can make the decision easier. Financing higher education is perhaps the biggest obstacle to earning a degree, but what if the employer shouldered all of the financial burden? Through tuition assistance or reimbursement benefits, an employee could learn new skills and become a reliable asset to their organization, with less stress about how to pay for it.
The problem? At many organizations that offer education benefits, fewer than 5% of employees take advantage of these programs, according to SHRM.
This is a missed opportunity for both employee and employer, especially in light of the pandemic, as fears of wide-scale layoffs and furloughs have caused many employees to contemplate career shifts and building new skills.
“Companies will compete on how well they are able to find, source, develop, advance, and retain talent,” according to research by the U.S. Chamber of Commerce Foundation. “Learners and workers will compete on skills and credentials and the ability to be agile in a dynamic labor market and economy. Communities, too, will compete on their ability to attract, develop, and retain a competitive workforce that will drive economic growth, opportunity, and prosperity.”
The global pandemic has introduced new urgency and risks that require bold thinking to update antiquated talent and education financing practices. Current approaches to financing education and career readiness fail to meet the needs of the labor market. We in higher ed and the employment space need to create employee education programs that are attractive and relevant for the employee and that can build and retain a skilled workforce for the employer.
A 2016-17 survey administered by the Graduate! Network found that from an employer’s perspective, education programs were influential in their ability to achieve organizational goals, including decreased turnover and increased customer satisfaction, employee engagement and productivity, and profit. Experts at McKinsey contend that businesses will emerge stronger from the pandemic if they start reskilling their workforces now.
There is enough evidence that this is the right path forward, so why aren’t we moving rapidly to scale employer-sponsored employee education programs?
Because employer-sponsored employee education programs are not ready to be scaled. The current user experience is Byzantine and lengthy, overly processed, and about as user-friendly as a rotary phone in an iPhone world.
To showcase the power of these programs, we need to create an experience that is both easy and interesting. Higher education and employers can come together to create innovative solutions that produce tangible results. Fiat Chrysler Automobiles US (FCA) partnered with Strayer University to offer its dealership employees and their families the opportunity to earn a degree at Strayer free of charge. According to 2017 data, participating dealers experienced nearly 40% higher employee retention and a 17% higher revenue growth than nonparticipating dealers.
But just creating a better experience isn’t enough. We need to show value, because for employees, the value of earning a degree or credential is not always clear.
A recent national poll by Strada Education Network found that there is growing interest in postsecondary education or training among adult learners aged 25 to 44 without a college degree. However, these learners are less likely than they were a year ago to believe that the education or training will be worth the cost and will help them get a good job. Fewer than one-third of adults without degrees reported understanding “very well” available career pathways, valuable skills, and details about potential education programs.
This is a call for employers to help. By developing solutions that provide employees with a clear path to success—from choosing a degree program that best fits their goals to mapping out which courses will be most applicable—employers can effectively train or reskill employees to meet their own workforce needs.
But how? Employers are working with cumbersome platforms, little to no measurement or tracking tools, and high fees for online program managers (OPMs) to administer education benefits.
The pandemic has reminded us vividly of the power of technology to alleviate and solve challenges. We talk with our doctors, bank securely, and order dinner, all on our phones—all but eliminating any argument that technology has no place in higher education. In that vein, to be successful, employee education programs must shift to be more like a make your own burrito bowl and less like a prix-fixe menu.
A partnership between Noodle Partners and Strategic Education—parent company of both Capella University and Strayer—adapts the insurance industry’s concept of “in network” and “out of network” to deliver relevant educational programs.
Through a newly developed employee education management portal, employees will be able to choose from Noodle’s network of public and private universities, find a program that fits their needs, and manage their benefits—all on one platform. Employers will be able to log into the same portal to administer and disburse funds as well as check on progress. This new level of data will allow benefits managers to better track returns on their investment and make adjustments as necessary.
This example shows how much there is to gain when higher ed and business come together for the benefit of adult learners. The key to a successful partnership is to prioritize the needs of employee-students, which are very different from those of traditional four-year college students.
There are more innovations like this that will achieve better results for employers and for workers. The U.S. Chamber of Commerce Foundation, in partnership with the Federal Reserve Bank of Atlanta and others, recently launched Talent Finance, a groundbreaking initiative to explore new private-sector-led solutions for investing in people and skills that keep pace with innovation and advance economic opportunity, inclusion, and competitiveness. Constant innovation and investment in the economy’s most important resource—human capital—is needed to build the workforce of the future. Talent Finance will develop new ways for employers and the financial services community to work together to identify private sector tools for financing talent development and new strategies for managing risk in the labor market.
The pandemic reminds us all that the way we’ve done things in the past is no longer a feasible option. For the United States to grow its economy and strengthen its global competitiveness, the education and business industries must reimagine their approach to expanding economic opportunity. Strategic investments need to be made on both the employer side and the employee side—with assistance from higher education companies that are willing to invest in promising technologies—to evolve the tuition assistance and reimbursement programs for the future. Their alliance is a path forward for meeting the evolving demand for new skills with an affordable and accessible education that benefits employees, businesses, higher education, and the overall economy during a pandemic, and beyond.
To learn more about WorkforceEdge powered by Strategic Education, click here.
Terry McDonough serves as president of alternative learning at Strategic Education, Inc.—a mission-driven higher education organization dedicated to advancing economic and career mobility through higher education. In his role, Terry oversees Strategic Education’s non-degree portfolio, including Sophia Learning, self-paced general education courses that are ACE-recommended for college credit; WorkforceEdge, a full-service, online employee education management portal; Degrees@Work, customized employer-sponsored degree programs for businesses; and non-degree web and mobile application development programs through DevMountain, Generation Code, and Hackbright Academy.
Cheryl Oldham serves a dual role as vice president of education policy at the U.S. Chamber of Commerce and senior vice president of the education and workforce program of the U.S. Chamber of Commerce Foundation.