College Tuition: The Next Employee Benefit?

Talk about a “game changer!” Walmart has made headlines by announcing that the retail giant will now offer all of its approximately 1.5 million employees - part-time and full-time workers from the front lines to the top of the organization - the ability to go to college for free!

Now admittedly, the headline might be garnering just a little more attention than it really deserves, as the program is not entirely new. In fact, Walmart has been offering its “Live Better U” program to its employees (associates) for 3 years.

Under the way the Live Better U program has operated since 2018, Walmart associates could pursue a variety of educational opportunities, from finishing high school to pursuing a masters’ degree (See Figure 1 - Walmart’s Live Better U Program Offerings - July 2021 below):

Figure 1: Walmart’s Live Better U Program Offerings - July 2021

Up until now, Walmart employees paid a “dollar a day” to participate in the Live Better U college tuition program. However, in a just announced major change to the program, Walmart perhaps “changed the game” in terms of employee benefits by making going to college free for all of its associates, expanding the program to cover not just tuition and fees, but books as well. This announcement made Walmart the focus of not just business news, but of the news in general, garnering it a great deal of good publicity. And today, with the difficulties across the retail industry, and indeed, across the entirety of the service sector, with recruiting and retaining employees today, the news about Walmart’s improved educational benefits will likely bring in new potential workers to the retailing giant at this critical time.

According to Walmart’s announcement, the change in the program will take effect next month. And now, ten universities - all with heavily online offerings - will be providers in the program, offering Walmart associates a range of degree offerings and certificate programs to choose from. The institutions that are now participating in Walmart’s Live Better U program are:

1. Brandman University
2. Johnson & Wales University
3. Pathstream
4. Penn Foster
5. Purdue University Global
6. Southern New Hampshire University
7. The University of Arizona
8. The University of Denver
9. Voxy EnGen
10. Wilmington University

In an interview, Lorraine Stomski, Walmart’s Senior Vice President of Learning and Leadership, commented on the move: "We are creating a path of opportunity for our associates to grow their careers at Walmart, so they can continue to build better lives for themselves and their families. This investment is another way we can support our associates to pursue their passion and purpose while removing the barriers that too often keep adult working learners from obtaining degrees." Walmart’s move has drawn widespread praise in the mainstream media on outlets such as CNN (“America's Largest Retailer Will Cover 100% of College Tuition for its Workers”) and NPR (“Walmart Offering Full College Tuition And Books For Employees”), and likewise brought the company a great deal of attention across social media. And yes, all of that attention will likely mean - you guessed it - new applicants for employment at Walmarts all over the country!

Analysis

This strategic management consultant and professor strongly believes that we will see more and more of these “educational benefit programs” be developed and implemented over the next few years. The rise of such employer-sponsored college tuition programs could well become not perhaps the norm, but a real differentiator between employers in the retail sector and beyond. Now certainly, Walmart is not unique in its support of its employees' educational pursuits, as Starbucks has partnered with Arizona State University to offer all its employees (full and part time) 100% tuition reimbursement to pursue their degrees, but with that institution exclusively.

Likewise, McDonald’s has dramatically increased its tuition assistance program for its employees in recent years:

The pressure to offer such educational benefits - and to make them cost free to employees to access - will likely only increase in the coming months and years. Indeed, the wider impact of Walmart’s announcement may be even more pronounced if more companies, particularly in the retail industry but even beyond, follow this market leader’s lead. It is highly likely that this will be the case over the coming weeks and months, and it would be anticipated that you will see other leading companies either enhance their existing tuition-reimbursement programs and/or create entirely new educational offerings for their employees as a recruitment and retention tool.

And the impact could go even beyond large companies, as smaller employers might feel the pressure to offer “educational benefits” to their employees in an effort to keep up in an increasingly competitive marketplace for talent. While they may struggle to do so individually, one could well anticipate the development of local and regional cooperative efforts tailored to help small businesses offer such benefits. Additionally, there is an opportunity for entrepreneurially-minded individuals and companies to position themselves as a middleman or broker between small businesses wanting to offer educational benefits to their employees and higher education institutions looking for the “enrollment bump” that would likely come from participating in such programs.

For colleges and universities, the Walmart announcement could indeed be a “game changer” as well, and not just for the 10 universities currently participating in this company’s program. One could well anticipate that more and more colleges and universities, including those that offer more “traditional” degree programs as opposed to mostly or exclusively online offerings, will want to enter the mix. This is because of a simple fact: Students coming to them by way of such educational benefit programs offered by Walmart or any other employer will be treasured!!

Think about it, from an administrative standpoint, students coming to a college or university through such programs come fully funded, with no worry of them being able to pay for their tuition and fees. As such, they are far easier to “manage,” with no concerns over their financial aid and no concerns about them “dropping out” over money woes - at least as long as they are employed by their sponsoring organization. And so while the worker may be feel “tied” to their employer in order to complete their degree program, so too will the worker/student feel tied to the university they are enrolled at through the employer-sponsored program (i.e. it is highly unlikely that a student would choose to switch from a university that is on the employer’s “list of participating and approved institutions” where they can attend at little or no cost to a school where they would be footing the bill). And finally, the institution gains customers (i.e. students) with little to no marketing effort or expense needed to do so, making such students even more cost-effective - yes, read that as profitable - for the colleges and universities involved in such educational benefit programs.

And so this could be an exciting few years ahead, both for employees and for colleges and universities. The Walmart formula for encouraging - and paying for - workers to pursue their education and become the managers and leaders of the future can be replicated across the landscape in one form or another - even for small businesses, and higher education institutions should be ready and eager to work with companies on such programs. More and more, traditional universities will compete with more online focused institutions to both participate in these educational benefit programs and yes, for the students they can gain from doing so. And yes, at a time when college finances are teetering on the brink in many cases and enrollments are challenging - or declining - across higher education, the opportunity to serve major companies and their employees will be too good to pass up for many colleges and universities. And why not? It would appear to be a “win-win” for all!

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About David Wyld

David Wyld is a Professor of Strategic Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, publisher, executive educator, and experienced expert witness. You can view all of his work at https://authory.com/DavidWyld.

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