Despite chatter about a weakening economy, employers added 815,00 workers to their payrolls in January and February, according to the Bureau of Labor Statistics.
The Federal Reserve’s Beige Book economic report covering the same time period says while there are “scattered reports of layoffs and some hiring freezes” because of uncertainty around the economic future, “labor availability improved slightly, though finding workers with desired skills or experience remained challenging.”
So, at the same time companies are laying off some employees, they are also expanding perks to retain workers with the skills they want and need, and even attract new ones.
Microsoft, for one, announced in January it was laying off 10,000 employees. That same month, it also announced it’s giving its employees unlimited days off called Discretionary Time Off. The company joins other employers offering similar benefits, such as Netflix, which has no vacation policy, and Oracle, which gives salaried employees unlimited time off.
Unlimited time off policies, notes LinkedIn, are growing, and are designed to attract and retain top talent, but it points out there are also potential drawbacks, including the possibility for employees to abuse the policy.
The perk is just one of several benefits that are becoming key recruiting and retention tools in a still tight labor market.
Workers Want Career Development
Sixty-five percent (65%) of workers now say professional and career development benefits are either very or extremely important to them, up from 51% in 2019, according to a survey by SHRM, the Society for Human Resources Management.
Large corporations across all industries are listening and are creating or expanding education benefits as a way lure talent and keep talent.
While at SXSW EDU 2023 in Austin this month, I spoke with Lisa Schumacher, director of education strategies and workforce policy of McDonald’s and Molly Nagler, PepsiCo‘s chief learning officer, about the education opportunities available to their workers.
McDonald’s: Archways to Opportunity
“We really are kind of a pipeline employer. One in eight Americans has a first job at McDonald’s. We want to prepare them for what is next,” explains Schumacher. That can mean how “people navigate their careers within the McDonald’s system – whether with a franchisee or in out corporate business. But it also with the understanding that not all 850,000 employees are going to stay with us forever.”
Schumacher says its education program Archways to Opportunity – created in partnership with EdAssist by Bright Horizons – is designed to both attract and retain talent, but it was also created to help prepare the employees for jobs today and in the future. Young workers aged 16-to-24 make up the largest group of employees.
“McDonald’s decided to go on this journey and look at where the people that work in our restaurants fall along the education spectrum. We had people who never completed high school. We had people who were either in college or wanting to go to college, and really didn’t necessarily know their path,” she tells me.
“So, it was an opportunity for us to really think about the fact that we know that there’s an education gap and a skills gap that exists in this country. And because 850,000 people work in McDonald’s restaurants, we really thought that we could be part of the solution to that challenge.”
Schumacher says that since the launch in April 2015, more than 75,000 restaurant employees in the U.S. have enrolled in an education program through Archways to Opportunity.
“We’ve awarded more than $165 million in tuition assistance. We also did an ROI study with Accenture in 2020 where we looked at what is the return on investment for this program. We found increased promotion rates, increased retention rates, and we actually found a correlation to sales in restaurants that had high participation in these programs.”
“We take a very human-centric approach to work and to benefits at PepsiCo,” Nagler explains.
PepsiCo’s myeducation initiative myeducation, designed through a partnership with Guild Education, offers 100% tuition assistance at select schools and programs that offer degrees, certificates, or certifications.
“We want to meet our learners where they are. That may mean that they need a college degree. They may need a bootcamp or certificate, finish high school, or learn English. We do this because we believe in lifelong employability.”
PepsiCo pays for courses to train for skilled trade jobs within the company such as commercial driver, machine mechanic, plant mechanic, and even digital bootcamps.
Nagler says there is no cost to the employee and there is need for manager approval, uh, there’s no cost to the employee.
“We’ve eliminated those barriers to access. Then it’s just for the employee to determine what makes sense for them. Certificates and degrees will help people succeed at PepsiCo, but it empowers everyone to continue their education and achieve whatever they believe is next for them in their career.”
“Education is a force for equity in the workplace. We have a steady pipeline of, of enrollments, with over 1,600 enrollments and nearly 400 graduates.”
“We believe that we’re stewards of their development and their career while they’re at PepsiCo, Nagler says. “We want to provide ample opportunities for them to grow and develop no matter where they go next.”
Expanding Education and Training Benefits, and Increasing Pay
Underscoring the challenging environment employers face, Home Depot is spending $1 billion to expand training and career development opportunities while also increasing hourly workers’ pay. In making its announcement, the company touted the fact it promoted 65,000 associates in 2022.
The move comes one month after Walmart, the nation’s largest retailer, announced it’s also raising starting wages to at least $15 an hour and expanding its education benefits under its Live Better U program. The program pays for employees who want to pursue a high school diploma, obtain certificates for skills training or obtain a college degree.
The nonprofit KFC Foundation recently announced it is now offering free college tuition to all employees at KFC’s 437 California restaurants that participate in the Foundation’s Franchise Donation Program.
The KFC Foundation says it partnered with Western Governors University. to enable its employees to “earn while they learn.” They will be able to choose from more than 60 different bachelor’s and master’s degree programs and certification programs across business, IT, education, and health care. The KFC Foundation says the program is non-competitive, meaning every eligible employee who applies and enrolls will get tuition coverage.
Among industries showing an uptick in employers paying for college: health care.
EdAssist by Bright Horizons counts a 33% increase in the number of health care companies offering free college in 2022 with the goal of attracting talent to a field in need of workers.
One example is Memorial Hermann, the largest nonprofit health system in southeast Texas. It is now eliminating out-of-pocket costs for employees seeking a degree or certificate with the goal of attracting employees. That’s expanding on the tuition assistance and student loan repayment plans it had already offered.
‘Employers Have to Get More Creative’
Whether it’s health care or another industry, the shortage of workers to meet employers demands is not expected to ease soon, according to economists at Glassdoor and Indeed. As a result, the trend of companies using benefits to set them is expected to continue.
“Employers have to get more creative in regards to inclusive benefits that they’re offering our employees,” says Kate Cheesman, vice president of customer success at DailyPay, a financial technology company that counts 750 employers as partners. The company uses technology to change the way workers are getting paid. It allows employees to use an app to access income they’ve earned at any time.
Chessman sat down with me at CES 2023 in Las Vegas earlier this year.
“Employees want to be able to have the flexibility and access to their income, and not have to wait for a payday in order to pay a bill,” she explains.
“Providing that flexibility the access to their earnings allows them to really be in the driver’s seat from an earnings perspective. If they want to pick up additional shifts, they have that instant access. So, we’re seeing 56% reduction in turnover with DailyPay users versus non-DailyPay users,” stresses Chessman.
It’s those kinds of results that are sending companies searching for ways big and small to keep employees from looking for the exit door.