Walmart, the world’s largest private employer, announced at its annual shareholder meeting on Wednesday that it was introducing a new benefit for its 1.4 million employees in the US that will subsidize the cost of their college educations at any of three partner universities, the New York Times reports:
The giant retailer said it would pay tuition for its workers to enroll in college courses, online or on campus, to earn degrees in either supply chain management or business. Full- and part-time Walmart workers can use the subsidy to take courses at the University of Florida; Brandman University in Irvine, Calif.; and Bellevue University in Bellevue, Neb.
The three universities were chosen because of their high graduation rates, particularly among part-time students, and their experience with those already in the work force, Walmart executives said. The Walmart employees will not be obligated to continue working for the company after they get their degrees, and must put up only $1 a day toward the cost of classes.
Walmart says its goal with this benefit is to enable employees to obtain college degrees without taking out loans, in contrast to some other organizations’ tuition benefit programs, which require employees to pay their tuition up front and then seek reimbursement from the company. All Walmart employees become eligible for the benefit after 90 days at the company and are under no obligation to continue working there after they have earned their degrees.
Walmart did not say how much it expected the benefit to cost, but anticipates that some 68,000 employees will take advantage of it in its first five years. The program may be expanded in the future to cover fields of study beyond the two programs mentioned above. Wednesday’s announcement is the latest in a series of changes the big-box retailer has made this year to boost its investment in its staff and augment its employee value proposition: Walmart raised entry-level wages from $9 to $11 an hour and expanded its parental leave policy at the start of the year, and recently partnered with the mobile health management platform Sharecare to provide a range of new wellness services to employees and their families. The company is also experimenting with a less restrictive dress code.
Tuition benefits for college or vocational education have become increasingly common among large US employers in the retail and fast food sectors in recent years, as these companies are seeing more value in retaining and developing employees in a tight labor market. Just within the past few months, Lowe’s, Taco Bell, McDonald’s, and Chick-fil-A have announced new or expanded investments in employee education. The attraction and retention effects of these benefits are significant: 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, stay tuned for more insights from our annual benefits communication survey in the coming month.)