- Target announced this week it will cover 100% of an employee's college tuition, fees and textbook costs.
- Walmart recently extended its existing education benefit to 100% of college tuition and textbooks.
- Both partner with Guild Education, whose CEO Rachel Carlson tells CNBC "we've hit the moment" where smart employers know education and upskilling is key to standing out as a company and winning the war for talent.
The war for workers isn't only benefiting the labor force in the form of higher employee wages, but a benefit arguably as, if not more, important to their economic mobility and long-term success: access to education.
"We've hit the moment where employers, and really the most innovative employers, are realizing the best thing they can do to differentiate themselves as a company and as an employer is to offer economic mobility, upskilling, and the opportunity to gain more skills and move up within a company or eventually move on," said Rachel Carlson, CEO of Guild Education, on CNBC's "The Exchange" on Thursday. Target partnered with Guild Education on its new education offering and has deals with Walmart and Chipotle, among others.
Though Walmart already subsidized employee education, the company recently said it would go a step further to cover 100% of the cost of its associates college tuition and textbook costs. Chipotle's CFO recently told CNBC that a debt-free education was a way to invest in its workers.
Target's education offering the 'most comprehensive'
Carlson described Target's offering as the most comprehensive that Guild Education has seen. It includes a high school completion GED program, undergraduate credentials and up to $10,000 towards a master's degree.
Carlson said while much of the focus is on debt-free college degrees, the high school completion program is important to Americans who didn't have the chance to complete high school at the age of 18. And while it extends to master's degrees, she said the high school and college components highlight the need among many front-line workers to have the opportunity to learn.
"We're seeing companies that are offering education and upskilling are winning the war for talent, seeing 25%-plus increases in job applicants, from high quality applications," Carlson said, adding that employee retention rates are double at many companies with which Guild works. "Chipotle, who we work with, has been very public about the fact that employees who take advantage of upskilling are being promoted at a dramatically higher rate."
Frontline employees who participate in the Guild programs are 7.5 times more likely to move into a management role than peers not enrolled, Chipotle has stated, while it has also seen a 3.5 times higher retention rate among employees enrolled as students in Guild programs.
These programs reflect the needs of diverse workforces at a time when corporations are not only facing a tight labor market in the short-term, but increasing pressure to balance classic shareholder capitalism that had dominated the markets since the 1970s with broader social goals, including racial and economic justice, and mounting evidence that the best long-term market performance may come from taking environmental, social and governance goals into account.
"Underrepresented employees, Black talent and Hispanic and Latinx employees are using it as an opportunity to differentiate themselves, and to use upskilling to get promoted," Carlson said.
The deals also reflect an understanding that the stereotypical idea of a college student does not reflect the reality of many students today.
"It's wildly exciting that we're finally at the point where the market is meeting the consumer," Carlson said. "The 18-year-old did want a campus and was devastated by Covid, but the 32-year-old-single mom, often a woman of color, she wanted to learn online."
Guild, which saw its valuation rise to $3.75 billion in a June fundraising, ranked No. 49 on this year's CNBC Disruptor 50 list, and also works with companies including Disney, Taco Bell and Lowe's to offer debt-free degrees to their employees. As of June, between three and four million workers at major employers were able to access Guild's platform, and Carlson said the total addressable market of Americans in need of upskilling is as high as 88 million people.
Guild's platform offers courses from high school to trades, associate's, bachelor's and master's degrees. The courses typically don't require a student to leave during the workday to complete a lesson or take an exam.
Guild Education works with nonprofit and public schools to which many students may not have had access. It works with historically Black colleges and universities and Hispanic-serving institutions, including the University of Arizona, which specializes in serving student populations that need upskilling.
Carlson said it is the schools as much as the corporations that are changing. "We have schools across the entire U.S. saying, 'How do we serve the new normal student, that 32-year-old single mom? It means she can learn.'"