Death of the entry-level job? No way, if major firms have anything to say about it.
As my colleague Haley Glover likes to point out, business is the largest consumer of education and has the most at stake when it comes to having a well-educated workforce.
So what are corporations doing to educate workers?
On the 11th installment of the Lumina Foundation podcast “Today’s Students/Tomorrow’s Talent,” Haley and I talked with current and former representatives from three companies—Discover Financial Services, McDonald’s and Cigna—that are setting the standard.
Jon Kaplan, founder of Corvantus Consulting, is the former chief learning officer for Discover Financial. He said spending money to develop talent is vital in a business world that’s becoming increasingly complex.
“When you look at the types of roles that are going to be in corporate America three years from now, five years from now, it’s hard to see there being a lot of entry-level positions” where people can gradually learn the skills they need, he said.
Kaplan said that in a return-on-investment study conducted with Lumina, Discover found that for every dollar spent reimbursing employees for tuition, fees, books—even the employee’s tax liability—the company earned back that dollar plus another $1.44.
The tuition-reimbursement program helped Discover stem high attrition rates and attract new talent eager to take advantage of the tuition benefit. The results became evident in wage gains and promotions.
“Corporations need to partner with their workforce to achieve great results,” he said. “With unemployment rates so low, companies recognize that they have to be a great place to work. Great cultures make great companies.”
At McDonald’s, the Archways to Opportunity program has been working since 2007 to help employees learn English and earn a high school diploma. The program also provides college tuition reimbursement and offers education counseling to help workers overcome hurdles blocking their education.
Rob Lauber, senior vice president and chief learning officer, said people “are looking for the way up the ladder…. We’re removing the barriers.”
Lauber said the idea is to prepare workers for future jobs—and not necessarily at McDonald’s. The fast-food giant recognizes that a lot of people “are on their way to something else.” In the meantime, though, McDonald’s has found that by providing “America’s best, first job” and some education, it’s helping retain workers and burnish its brand.
“If you can unlock people’s confidence, then all of a sudden they can see new possibilities,” he said.
Like Discover, the global health services company Cigna has realized a significant return on investment through its tuition-reimbursement program. Linda Carpenter, who manages the program, said the payback is 129 percent overall—and even higher for employees in entry-level jobs. Employees who use Cigna’s education benefits are 10 percent more likely to be promoted and 8 percent more likely to stay with the company.
Carpenter said people with skills in areas such as project management, data analytics, finance and accounting, and healthcare administration are critical for Cigna’s long-term success. The company offers larger financial incentives for its workforce to earn degrees and certificates in those areas. It also works with universities to eliminate upfront costs for employees who are taking classes, so there are no financial barriers.
The program works, Carpenter said. In fact, one of the employees taking advantage of the tuition-reimbursement benefit is Carpenter herself: She’s in the third year of a doctoral program in organizational leadership.
For more about companies that build their employees’ talent, please see the ‘Investing wisely’ issue of Focus.