Why upskilling programs are the secret weapon in the War for Talent
The companies that win the War for Talent will be those that offer all their employees — including their frontline workers — not just jobs, but careers.
As the country recovers from COVID-19 and the economy heats up, companies across every sector, including manufacturing, restaurants, and construction, are struggling to find workers. The result: a record 8.1 million unfilled jobs across the country. In addition, a March 2021 survey by Prudential found that almost a quarter of workers currently in jobs say they’re planning to leave. Many factors are impacting the labor market, but it’s also increasingly clear that Americans are going through a “great reassessment” of work.
American workers aren’t just looking for new jobs, they’re rethinking the entire trajectory of their careers. Young adults are also questioning the standard pathway of heading straight to college, especially considering that they’ll most likely be managing debt upon graduating.
This mass reassessment of careers and the influence it has on shrinking talent pools aren’t likely to go away quickly. Well beyond 2021, automation and other technological changes will continue to remake work and lives. The prime-age working population is decreasing as well.
As the risks and rewards of traditional education continue to shift, education programs can be a powerful tool to attract talent. Debt-free education programs — in which companies cover all or most of the costs for employees to earn degrees and certificates from universities and training providers — can give companies a competitive edge for talent. Walmart is touting its Live Better U program, which saw a 93% spike in new graduates in the past year, as a major advantage in competing for talent. When the program first launched, there was a 15% month-over-month increase in high-quality job applicants.
John Coyle, an associate in Florida, was one of those new hires. “The main reason I applied for a job at Walmart is because a friend who works for Walmart shared a link to the press release [saying the company] provided free education benefits,” said Coyle.
“I started applying to every opening that I saw available. Eighteen months in and everything I thought was going to be the case has been the case. I wouldn’t want to work anywhere else.”
Employer education programs also create internal hiring pipelines, allowing companies to grow their own talent, rather than just competing for it on the open market. Chipotle, for example, has seen a 3.5x higher retention rate among students enrolled in the program. These same workers were also 7.5x more likely to move into a management role.
Lastly, a major study of Cigna’s education benefits found that the program increased retention by 8% and promotion by 10%. Employees who participated in the program saw 43% more incremental wage gains than non-participants.
Company-funded college programs are particularly well-suited to meet the evolving needs and desires of both experienced workers and young adults. The programs provide access to college degree programs at a low cost or entirely debt-free, with the company either fronting most of the cost (which is ideal) or reimbursing the employee. They turn the traditional narrative of getting a degree to get a job on its head.
For experienced workers, such programs can provide much needed upskilling and a pathway to career growth. Companies that invest in these programs send an important message to both prospective and current employees: We understand that a job isn’t just a job, and we’re willing to invest in you. In the same Prudential survey, among the American workers saying they plan to leave their current job, 8 in 10 are concerned about their career growth and 7 in 10 say the pandemic caused them to rethink their skill sets.
For young adults who are just figuring things out, employer education programs create a lower cost, lower risk pathway to a degree. This approach also lets them simply go ahead and jump-start their career without a looming amount of debt hanging above their heads. McDonald’s has made a brand out of that approach with its Archways to Opportunity program, billing itself as “America’s best first job.”
That kind of benefit is attractive for the 40% of students who need to work full-time in college, and for the 50% who are questioning whether their degrees will be worth the cost. Not to mention, it may also be compelling for young adults who haven’t seriously considered college, but might with the right employer and the right support.
The bottom line is that education and upskilling programs are a powerful way both to attract new talent and to advance existing employees into hard-to-fill roles. And it’s the one tool in the War for Talent that is designed to help individual people, not just companies, thrive in the future of work.