In today’s job market, tuition assistance has become one of the most popular incentives companies use to attract and retain workers.
Now, some employers are taking it a step further with free college programs to provide even greater financial support.
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Most recently, Citi announced that it is offering fully funded degrees from partner schools, including the University of Maryland Global Campus, Walden University, and Western Governor University, as well as tuition assistance. for bachelor’s, graduate and certificate programs.
According to the company, which is working in partnership with EdAssist by Bright Horizons, approximately 38,000 frontline Citi consumer banking employees will now be eligible for the expanded education benefits program, including free college.
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The goal “is to reduce the economic barrier for our colleagues to obtain a formal certification or degree, while strengthening Citi’s competitive advantage,” said Cameron Hedrick, director of learning at Citi. It “helps us do both”.
Among its customers, EdAssist has seen a 33% increase in the number of companies offering free education programs in 2022 alone, including employers such as McDonald’s, Synchrony, Raytheon Technologies and T-Mobile.
Other big names, including Amazon, Home Depot, Target, Walmart UPS, FedEx, Chipotle and Starbucks, also have programs that help cover back-to-school costs. Waste Management will not only pay for employees’ college degrees and professional certificates, but will also provide this same benefit to their spouses and children.
Coming out of the pandemic, these types of benefits are playing an important role in the competition for talent, and as a result, more and more companies are providing opportunities to develop new skills, according to the recent Benefits Society. for Human Resource Management. investigation.
Now nearly half, or 48%, of employers said they offer undergraduate or graduate tuition assistance as a benefit.
Of course, employers paying for their employees to graduate are nothing new. For decades, corporations have taken over college education and white-collar MBAs.
However, many companies are now extending this benefit to frontline workers — such as drivers, cashiers and hourly workers — while heavily promoting the offer more than before.
For employers, education as a benefit is a cost-effective addition to base offerings, according to Jill Buban, workplace education expert and managing director of EdAssist.
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“We’re seeing that change a bit in how they look at attracting talent,” Buban said. Employers find “it’s much more profitable to hone their current base”, she added, rather than “trying to find workers”.
“For those who take advantage of this ‘no cost’ education offer, the financial return is compelling, and Citi will benefit greatly from their new skills development,” said Citi’s Hedrick.
Jack Hartung, Chief Financial Officer of Chipotle told CNBC that employees who take advantage of the company’s free degrees are 3.5 times more likely to stay with the company and seven times more likely to advance to management.
Not only does free or discounted higher education improve recruitment and retention, it also reduces student debt while improving long-term employee well-being, experts say.
Despite a strong desire to return to school, less than half of employees said they had been able to pursue educational goals in the past few years, mostly due to time commitment and financial barriers, according to a study by Bright horizons.
The struggle is even greater among minority groups, Bright Horizons found.
At this point, 44% of black employees said they had trouble paying for education, compared to 29% of white employees. There is a similar gap between men and women. About 36% of working women report financial barriers to education, compared to 22% of men.
“There are always the constraints that all working adults have: the time, the financial commitment and the confidence to get back to school,” Buban said.
“These benefits can provide an extra boost – it can be a real game-changer.”