The credit card company Discover has launched a new program that will pay for its 16,500 employees to earn bachelor’s degrees from three partner universities in certain business- and technology-focused majors at no cost to them. Fortune’s Lucinda Shen reported about the announcement on Tuesday:
Discover says the new program, dubbed The Discover College Commitment, will cover tuition, fees, books, and supplies for U.S.-based employees. The credit card issuer will offer a full-ride specifically for courses in cybersecurity, business, and computer sciences—burgeoning areas that the firm believes could strengthen its own business while also providing a long and stable career for its workers. …
Additionally, Discover plans to cover any income taxes that may be placed on employees due to the program. Due to IRS regulations, employers may only offer up $5,250 in tuition benefits to workers tax-free.
All employees are eligible, provided they work at least 30 hours a week for the company and have not been flagged for conduct issues or severe underperformance. Discover employees can complete their degrees at the University of Florida, Wilmington University, or Brandman University. The program is similar to one just launched by Walmart late last month, which also covers online or on-campus at University of Florida, Brandman University, or Bellevue University. Walmart’s benefit allows employees to study supply chain management or business at an out-of-pocket cost of $1 per day.
Tuition benefits for college or vocational education are becoming increasingly popular with US companies that employ large numbers of workers without university degrees, particularly in the retail and fast food sectors. Over the past few months, Lowe’s, Taco Bell, McDonald’s, and Chick-fil-A have also announced new or expanded investments in employee education. These benefits are geared partly toward workforce development and upskilling, but also toward attraction and retention; in a tight labor market, employers have to work harder to convince employees both to join them and to stay with them. Helping an employee obtain a diploma can build long-term loyalty to the organization while giving them a concrete reason to stay with their current employer for at least as long as it takes to earn their degree.
The attraction and retention effects of these benefits are meaningful: Our latest survey data at CEB, now Gartner, shows that 61 percent of employees consider education benefits an important factor in making a decision about a job offer.
CEB Total Rewards Leadership Council members can learn more about this and other insights from our benefits communication survey at our upcoming executive meetings in New York and San Francisco.