Photo: Walmart
What can rival retailers learn from Walmart’s free college degree program?
Walmart is really taking its “Save Money. Live Better” mantra seriously. The retailer announced this week that it plans to pay 100 percent of the tuition and textbook expenses incurred by company employees who participate in its Live Better U (LBU) education program.
Walmart, which is the largest private employer in the U.S., has committed to spend nearly $1 billion in support of its workers as they seek career-related training and development. The program is open to the roughly 1.5 million full- and part-time workers at Walmart and Sam’s Club.
“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,” Lorraine Stomski, senior vice president of learning and leadership at Walmart, said in a statement. “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 announcement represents a modification of the LBU program, launched in 2018, that allows associates to pay the equivalent of $1 a day to further their education. Textbooks were not included. The retailer added a new perk a year later to attract high school students to its workforce that included free preparation classes for ACT and SAT tests, up to seven hours college credit as part of LBU’s College Start program and debt-free degrees in business, supply management and technology from participating institutions.
The company is also adding approved college degree and certificate programs in business administration, cybersecurity and supply chain, for which it will foot the bill.
“These additional offerings join a robust catalog of programs to set associates up for new career opportunities,” Ms. Stomski said. “Our education offerings tie directly to our growth areas at Walmart, and what better way to fill the pipeline of future talent than with our own associates.”
Walmart is also adding four academic institutions to its roster of LBU providers — Johnson & Wales University, the University of Arizona, the University of Denver and Pathstream. Walmart is currently also working with Brandman University, Penn Foster, Purdue University Global, Southern New Hampshire University, Wilmington University and Voxy EnGen.
Discussion Questions
DISCUSSION QUESTIONS: Should retailers make continuing education benefits a greater focus of their human resources packages in light of the cost of earning degrees and the desire for career development? How do companies without the resources of Walmart compete in this space?
Poll
Loading …BrainTrust
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Ananda Chakravarty
Vice President, Research at IDC
Now this is what I call investing in your people! If retailers want young people to work in retail, and sincerely make it a career, then investing in their education is an important step. The size and scope of the education support Walmart is offering appears to be industry leading. But as altruistic as this may all seem, make no mistake, investing in people is good for Walmart’s business. Happy, engaged employees deliver better service and better service keeps customers coming back. Other retailers take note: this is good for employees, good for customers and good for your business.
Investing in employees through education and personal growth can only benefit the retailer as the employee will be empowered to stay with the brand for years.
It’s authentic, it’s valuable, and it’s a way for retailers to truly give to invest in their communities and it will be reciprocated.
I love this and hope that more retailers bring on these type of programs.
For years, Walmart has had a training program for rising managers, complete with cap-and-gown graduation ceremonies. Now they’ve raised the bar with this new program. Walmart’s rivals need to pay attention.
Walmart has the deep pockets, the relations, and the resources to fund a program that will throw-off the money needed for this program. Smaller companies are at a disadvantage. But there are other creative things that retailers can do. For example, for a workforce that might want to work in a different (read more upscale) environment, they can pay for part of the total, or gradually, depending or performance or seniority criteria.
There are many retail companies, like HEB, that have made education a focus for many years across all levels from primary to the college level. I am all for companies that invest in their people to grow as individuals.
Not all retailers are in a position to match Walmart’s program, but all employers should invest what they can in what HR folk call “up-skilling” their workforce. For Walmart — especially in today’s tight labor market and in an era when college tuitions are increasingly out of reach to lower and middle income workers — this is a stroke of genius. Notice, they aren’t paying you to study 14th Century Latvian poetry. They are underwriting educations in the areas they need, building personal loyalty to the company at the same time they expand the pool of skilled potential employees in critical areas.
Today’s B.A. or B.S. is (barely) the equivalent of yesterday’s high school diploma. Soon the same will be true of Masters degrees. And, with academic institutions feathering their own nests while students take on sometimes crippling personal debt to finance these needed degrees, I’m betting a lot of those Latvian poetry scholars are going to develop a sudden interest in supply chains.
You’ve hit the key, Ryan — they are educating their workforce for what Walmart needs and we would assume these graduates have an inside track, already knowing the Walmart philosophy.
The only downside I see to Walmart’s approach is the predetermination that a liberal arts degree is somehow an impediment to success in the workplace when many of those pursuing this form of education are less constrained by traditional thinking than computer scientists and business administration majors. Most of what retail leaders need is still learned on the job.
As a Liberal Arts grad, of course I totally agree, but this program is designed to answer Walmart’s immediate conventional needs. It’s really sort of a vocational education program.
Walmart is smart in controlling the education options — this is not a free ride to attend any college or university. The curriculum is focused on programs supported by their LBU structure and employees still have to go through some hoops to engage. The process allows Walmart to control costs. Many of the programs offer up online learning and are focused on Walmart’s specific needs, which can pay back in spades if employees stay on board.
Earning degrees are not the real objective, but becoming more focused on education relevant to the company is important. Other retailers can match this type of program albeit on a smaller scale, especially with the right partners. Walmart wouldn’t be able to absorb the $30B in costs if it were sending its 1.5MM employees to a year of typical college(~20k/yr). The costs may be an improvement over the $365/yr allotment in the earlier $1/day program.
If companies are having trouble hiring enough workers, then they may have to spend more money through higher wages or signing bonuses to hire and retain good workers. Having a well educated workforce is a benefit for companies. Then spending money to pay for employees to get a college degree seems to benefit employees and employers. Seems like Walmart has chosen a great strategy by choosing sing degree areas that will benefit the company and paying for employees to get those degrees.
There’s a large and rather atypical split in the poll results today, and I suspect it’s due to people looking at this in a general, philosophical sort of way (“education is always good”) vs. the specific program details (and probably some stereotyping of the type of people Walmart employs).
At first glance it’s impressive: a billion dollars (exclamation marks optional); but match that against > one million employees, and the per employee amount looks much less impressive. Of course not every employee will make use of this … which really brings us to the main question: how much demand for this is there?
As for other companies matching this, I think the same logic applies: while few can develop customized programs with colleges, many can offer ~$700 per head in assistance … or more.
Excellent approach by Walmart. My own Master’s Degree was paid by the company I worked for at the time (aerospace giant General Dynamics — it was a Master’s in Applied Mathematics). A tremendous employee benefit.
What about other retailers? These massive programs are difficult for smaller organizations. Still, I’ve found employees who enjoy working for a company are pleased by any amount which can be contributed toward education — even if it’s only a portion. Working for an employer they prefer even though the college benefit isn’t as robust is quite acceptable — and if it’s not then they probably should be at Walmart.