Typically, the narrative is that you have to go to college to get a good job. But what if the job you already have could help you go to college? There are millions of “underskilled workers” across the country, meaning there are job openings out there, but many Americans don’t have the educational requirements necessary to fill them—and the cost of higher education can often make that impossible.
According to Guild Education, an education technology startup, there are 88 million Americans in need of upskilling or reskilling in order to be able to compete in the workplaces of the future. Guild is working on helping those Americans get the skills and education they need with employee-sponsored education benefits.
Founded in 2015, Guild—the winner in the education category of Fast Company’s 2020 World Changing Ideas Awards—helps employers create education programs for workers by connecting companies with higher-ed programs at nonprofit universities. In 2019, the company struck major deals like the one with Chipotle, in which the chain covers 100% of tuition costs for 75 degree programs—a first, Guild says, for the fast-casual restaurant sector. In total that year, Guild helped its students avoid more than $100 million in student debt.
Besides Chipotle, Guild works with big name businesses including Disney, which also pays 100% of its employees’ education; Walmart, which asks their employees to pay $1 a day while enrolled; and Lowe’s, which gives employees up to $2,500 to gain a certification in trades from HVAC to appliance repair. Employees in Guild education programs can pursue degrees from a bachelor’s in psychology to a master’s in information and communications technology, from about a dozen participating universities—including University of Arizona, Southern New Hampshire University, and Bellevue University. They can also pursue certificates in skills from plumbing to software engineering.
This arrangement clearly benefits the employees and the schools, but why would the companies bother to foot these bills? “Most employers are facing a number of factors related to their employee experience around how to recruit more high-quality employees, how to retain them, how to upskill them for a future job at the company,” says CEO Rachel Carlson. According to Guild’s internal data, an education program can help increase the number of high-quality job applicants by 25%, and also helps reduce turnover. A lot of these companies have high turnover rates—Chipotle’s is about 150% according to 2019 reporting from the New York Times—but Carlson says for employees who are also Guild students, they’ve seen turnover rates fall to about 5%. Internal Guild data has also found that an employee enrolled in the education program has a 2.6 times higher likelihood of being promoted on the job, according to Carlson.
Carlson spent years working in the community college space, and she saw how few students were actually earning degrees—studies have found that fewer than 40% of community college students earn a certificate or degree within six years of enrollment, and though community college is cheaper than (particularly private) universities, community college students are disproportionately likely to default on their student loans. “For too long, the story’s been told that that’s because these folks are dropouts, they’re not capable, they’re not academically prepared to succeed in college. . . . That’s not true at all. They’re not dropouts, we just send them to dropout factories,” she says.
The same thing applies to for-profit universities that see low graduation rates, she adds. “There are hundreds of high-quality schools that are dying to meet those students and dying to help those folks prepare for the future of work, but there’s no matching system today.” Using an employer as that matchmaker, Carlson says, is a great way to get these people to higher education institutions, without burdening them with student debt—and a great way, she adds, to get insight on what education these students should pursue, based on what kinds of higher-skilled jobs those employers might need to fill.
Guild Education, which became a unicorn in 2019 following a $157 million fundraising round, did not invent the idea of education as a workplace benefit; employers have long provided tuition-assistance programs, and for many of the same reasons they would through Guild, to reduce turnover and increase the chances of filling more senior roles internally. But Guild has helped bolster those programs, the company says, and make all stakeholders—employers, students, and schools alike—see the increasing value in education benefits, and the importance of these programs as our workforce continues to change.
Currently, more than three million Americans have access to Guild, and 400,000 have started their back-to-school journey through Guild programs. Carlson hopes to reach millions more. “We believe if we do our job correctly, that 20, 30 years from now, many, many millions more Americans will be prepared to succeed in the future of work,” she says, “versus being displaced, or unemployable, or suffering from a number of the economic trends that we see coming our way in the American economy.”