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Toolkit: How to design an education benefits program for frontline workers

by | Aug 16, 2022

The Pathstream toolkit to help you build an education benefits program for frontline workers. 

 

How to optimize your education benefits program?

Offering access to a catalog of certificate programs or degrees and hoping for the best will not keep frontline workers engaged or improve their experience at an organization. Why? If frontline workers aren’t using their current education benefits, it could be because they had mixed experiences with programs or schools in the past. Programs need to be built with adult learners in mind so that learning seamlessly fits into their schedules and includes mechanisms to motivate and support students. 

In the following sections, we’ll share our tips for designing a robust and modern education benefits program for frontline workers.

Defining terms 

Frontline workers are hourly workers, primarily individual contributors, making less than $22 per hour across select industries (McKinsey).

Employee experience encapsulates what workers encounter and observe over the course of their tenure at an organization. Factors that affect it are compensation packages, company culture, team dynamics, and total rewards benefit packages.

Tuition reimbursement programs are considered the least “modern” form of educational assistance. Under these programs, employees typically pay out of pocket for an eligible education program and then are reimbursed after completion by their employer. These programs often have low adoption among frontline or low-wage workers who struggle to front the cost of an education program.

Tuition assistance programs are where the employer pays upfront for education costs or a providing institution defers tuition until program completion when the employer has agreed to pay. Tuition assistance programs are generally more attractive to employees and achieve higher utilization.

Modern education benefits programs are a form of tuition assistance where the employer treats education as a benefit like health insurance or a retirement plan that should be offered to employees as part of their total compensation. These programs have minimal upfront paperwork, approval, and cost burdens for the employee. Companies that offer these benefits often work with a third-party benefits vendor to give employees access to a catalog of approved offerings in which they can seamlessly enroll.

Phase 1: Assemble the right project team to design and execute your education benefits program. 

Robert Rothschild Farm is a small company in the Midwest. They managed to increase sales, improve product quality, raise employees’ performance-appraisal ratings, and slash controllable costs. How? They changed their total rewards system by launching a company-wide initiative to find out what their employees really wanted. Then they implemented those changes. 

The most successful initiatives start with a project team that includes in-house HR executives, high-performing employees, frontline workers, and a partner with the technical knowledge to develop a program to complement that complements an organization’s skills needs. A well-rounded team should reflect the organization and have the credibility to execute the initiative. We recommend the following team makeup: 

education benefits program for frontline workers - career progression map

Phase 2: Evaluate your education benefits program based on the current employee experience.

Employees’ career advancement needs differ from employers’ perceptions of those needs. Employers often emphasize intangible benefits like recognition and job fulfillment, but neither drive retention in the same way that sufficient pay, career mapping, or upskilling does (McKinsey). 

Forward-thinking organizations are discovering how their employees view professional development opportunities and redesigning education benefits programs to meet those needs. For example, four years ago, Chipotle expanded its education benefits program to cover 100% of tuition costs for college degrees, certificate programs, and more. Today, the company’s retention rate is three times higher among employees participating in these programs.

To dig in and uncover what employees want in an education benefits program, we suggest organizations: 

Conduct focus groups.

Learn more about how the current education benefits program is perceived, its effectiveness, and what type of education benefit offerings employees want. Encourage participants to ask questions, raise concerns, and give them a chance to develop ideas to improve the benefit. Be sure to include employees and management, but keep them separate to ensure honest feedback. 

Review the strategic plans that helped your organization develop the previous education benefits program.

It’s important to assess why and how your business saw this benefit fitting into business goals (e.g., lowering turnover or attracting new talent). 

Examine the data and pull actionable insights.

HR departments collect data via associate surveys, testimonials from employees that utilized benefits, performance reviews of employees that took advantage of these programs, etc. It is vital to analyze the program’s effectiveness and determine if it met the organization’s previous business goals. 

Look at actual pay levels, market rates, job descriptions, and job titles.

This information will help the strategic partner an organization hires to not only prescribe solutions but accurately map out career pathways that are clear and aligned with employees’ skillsets. 

Survey your employees.

A strategic partner can design and administer a survey to learn about employees’ attitudes toward education benefits. 

Identify digital skills gaps.

Forward-thinking companies are thinking ahead and know their future talent pipeline needs. The upskilling opportunities in the program should enable frontline employees to develop skills they can use on the job, and advance their careers. Companies like Walmart have incorporated programs in supply chain management, sales operations, and more to align with their corporate business strategy in online shopping. Macy’s offers data analytics, digital marketing, and customer relationship management certificate programs to employees to double down and achieve company-wide omnichannel marketing goals.

 

Phase 3: Building an education benefits program your frontline workers can utilize. 

Building a modern and valuable professional development for frontline employees is no longer complicated once you’ve done the work and figured out what you need. An outside consultant or partner is key in this process. They’ll offer practical solutions and advise you on what programs need to be offered to build an engaged workforce with versatile, job-relevant skills.  We have found that a successful and modern education program includes the following elements:

1. Create clear internal job typologies that describe career advancement pathways for frontline employees.

Establishing a process to define career pathways helps frontline employees map out the skills and training needed to move up to specific roles and functions. Organizations that show their employees a direct path to career advancement in front of them improve retention, boost confidence, and keep their workforce focused and motivated. 

2. Offer career coaching benefits.  

This is a valuable but overlooked benefit for employees. Often, we expect managers and supervisors to serve as career coaches. But very few companies have the resources to train their upper management to be effective at career counseling. Employees lacking the tools for professional development affects their success and impacts business.

Forward-thinking HR leaders know that career counseling is a strategic resource that can help employees and their managers thrive. By providing a means for employees to reach higher career aspirations, career counseling can help individuals and businesses alike achieve success. Hiring a partner that offers career coaching increases employee productivity and performance, retains valued employees, and is cost-effective.

3. Cover the costs of certificate programs and degrees.

While 56% of companies offer some tuition assistance via their education benefits, only 5% of employees take advantage of it. These programs deliver strong ROI for companies. For example, Cigna’s education reimbursement program had a 129% return on investment due to avoiding talent management costs.

Tuition reimbursement programs are less likely to appeal to frontline employees or others in low-wage jobs who have to front the cost of education programs out of pocket. They often don’t have the budget to pay thousands of dollars for a degree or certificate program or want to risk not qualifying for reimbursement. As a result, these policies tend to see lower utilization rates. 

Under IRS code 127, employers are allowed to provide tax-free payments of up to $5,250 per year to employees. Forward-thinking companies realize that this is a small investment compared to recruitment and training costs to replace an employee. Offering a generous benefit can incentivize frontline or hourly employees to stay with a company because it reduces the out-of-pocket burden on the employee to add new skills to their toolbox. 

4. Expand the pie.

If you’re taking advantage of tax incentives by offering a tuition assistance program, you’re required to offer it to all employees on a nondiscriminatory basis. But, take it a step further by offering education benefits to employees who work part-time or just started at the company.

By doing this, your company can attract an entirely new talent pool that might be interested in working 10- 20 hours per week as they study. Once they earn their degree or complete a certificate program, they will be loyal and skilled workers who are prepared and incentivized to take on management or leadership roles at your company. 

Frontline worker case study - Target

5. Customize content to teach skills that align with your industry.

By building learner-centered programs that treat students as whole people with diverse motivations, backgrounds, and strengths, HR leaders can help workers develop not only skill proficiency but also promote satisfaction and retention. Focus curricula on filling the gaps your industry needs. For example, the insurance industry needs more employees proficient in digital skills like data analysis, sales, or marketing. Incorporating training in customer relationship management software, digital marketing, SQL, or data analytics that complement your industry enables your workforce to apply their new skills at work. 

Frontline worker case study - amazon

Phase 4: Communicate the value of education benefits to increase utilization.

Sixty-five percent of frontline employees are unsure of how to achieve career mobility. The number is higher amongst women, groups without high school degrees, and younger employees. A comprehensive and valuable total rewards package with a well-defined education benefit is great. But communicating its value to your frontline employees is an often overlooked yet critical step in improving retention. 

In the past, HR teams worked tirelessly to create and launch a robust education benefits program for frontline workers, only to see utilization rates slowly taper off. Forward-thinking leaders know that building a marketing campaign into your total rewards strategy to advertise new education benefits and communicate career mobility opportunities more frequently will increase awareness. 

Companies with the best adoption rates educate management about new total rewards programs and encourage them to initiate conversations with their teams. Walmart, for example, played recorded messages advertising their education benefits to employees who worked the night shift in some of their retail locations. Waste Management created an internal company screensaver featuring a picture of a frontline employee who used an education benefits program to get a new job within the company. 

Create an internal marketing strategy to introduce your new education benefits policy and explain the history behind the program’s preconception. Employees will be more inclined to use benefits when they know HR leaders incorporated the feedback they provided. Your campaign could include: 

  • Advertising the program digitally (e.g. emailing employees) and in print (e.g. total rewards brochures). 
  • Add an Education Benefits Program section on your company’s intranet. 
  • Showcase success stories of frontline employees that used education benefits and advanced in their careers monthly. 
  • Host an Ask Me Anything-style webinar for employees to ask questions about the new policy. 
  • Educate frontline management on the new policies and share tips on how they can encourage their teams to take advantage of education benefits. 
  • Send out quarterly emails with suggested courses or programs for your employees. 
  • Describe career advancement opportunities in internal job postings, such as the roles previous employees at that level ascended from or types of or certificate programs available to help them learn the skills they need for the job. 

 

Working with a strategic partner

HR leaders recognize that employee education is more than a benefit; it’s a strategic investment in their organization’s future. By recognizing education benefits programs as an investment, they can restructure their education benefits program for frontline workers by working with a partner that can help them reach their goals. 

Pathstream Value Add

Curious to learn more about modernizing your tuition assistance program? Schedule a call with Pathstream’s VP of Business Development, Jihan Quail, to discuss how to add exciting new certificate programs to your company’s approved list of education offerings and discuss customized solutions.

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