Are Full Tuition Reimbursement Programs Utilized by Front-Line Employees?
In September 2021, Amazon announced that it would pay full college tuition for its 750,000 front-line employees. The benefit not only included tuition but also the cost of books and fees. The new benefits were an expansion of the company’s Career Choice program which 50,000 employees had participated in over the past 10 years. Amazon estimates spending approximately $1.2 billion over the next five years to support this program.
Dave Clark, CEO of Worldwide Consumer at Amazon, stated that the Career Choice program was launched to remove the biggest barriers to continuing education – time and money. He also cited the construction of 110 on-site classrooms in fulfillment centers in 37 states. The program expansion would now include full tuition for associates and bachelor’s degrees as well as GED programs and ESL proficiency programs. Tuition and fees would be paid in advance rather than reimbursed, eliminating the need for employees to pay out of pocket. There is no limit to the number of years that an employee could utilize this benefit, and employees are eligible to participate 90 days after their employment start date.
Last week, Amazon announced that more than 140 colleges and universities are participating in Career Choice. Four non-profit universities with large online footprints were tapped as national partners. In addition to these online programs, courses are also offered at the 110 classrooms on-site at its fulfillment centers. The company wants to upskill more than 300,000 of its U.S. workers to help them land jobs in high-growth fields at Amazon or elsewhere as the company continues to automate jobs. They are focused on upskilling opportunities that pay more than the $18/hour that the company offers front-line workers.
Paul Fain reported in his The Job newsletter that the reason Amazon selected more than a hundred community college and four year college partners was that many employees (and their future employers) preferred “local” brands.
Amazon has aggressively developed training programs for its employees and others over the years. Its Amazon Web Services (AWS) division has developed free cloud training classes that they hope to provide to more than 29 million people globally.
While Amazon’s statements about the intentions of its Career Choice program may be sincere, the underlying reason may be related more to the recruitment of employees at its fulfillment centers. In his recently published book, Fulfillment, Alec MacGillis wrote that the pay isn’t great for workers at Amazon’s fulfillment centers and the physical exertion is taxing. In a September article in Reuters, Amazon announced that it was attempting to hire 125,000 additional workers in its fulfillment centers and starting wages were approximately $18/hour.
It is difficult to attend college as a full-time, working adult student. Amazon’s statement that there is no time limit on how long an employee is entitled to use the college education benefit is smart for many reasons, namely that their workers are more likely to be part-time students while working full-time.
As an educator, I have reviewed students’ explanations for stopping out and have never seen an explanation that their employer stopped reimbursing them for college. As a former healthcare executive, our similarly generous education reimbursement programs were utilized by a small percentage of our overall workforce, particularly our entry level wage employees with no college degree.
With nearly two decades as a healthcare executive and two decades as a higher education leader, I have concluded that entry level employees don’t flock to college tuition reimbursement programs for several reasons, two of which I will explain further. Reason number one – many individuals without a degree have no desire to continue their formal education. Reason number two – they don’t have the time to go to college even if someone is reimbursing them or paying up front for that education.
In her 2001 book, Nickel and Dimed: On (Not) Getting By in America, Barbara Ehrenreich goes undercover and takes entry level jobs across industries and geographies in the U.S. Based on her experiences, she wrote that one low-wage job is not enough to support one person, much less a family. Many of her co-workers lived at home with relatives or in cheap hotels because they could not afford to pay for apartment rent and security deposits. Many also worked two jobs in order to cover their cost-of-living expenses.
Completing college courses while working one full-time job is not easy. I posit that completing college courses while working one full-time job and a second part-time job is nearly impossible. An additional complexity is the fact that it may have been a decade or more since the working adult student participated in a formal academic course. It takes a while to redevelop the skills to schedule time for reading and completing assignments in addition to completing the assignments.
If a company truly wants its entry level employees to complete college courses or upskilling training programs, they should give them paid time off to attend those courses in on-site classrooms like the ones built by Amazon. I didn’t read anywhere that Amazon intends to add that benefit to the free tuition, fees, and books benefit. Until employers increase entry level wages to a floor high enough to cover rent and other basic costs, education is going to take a back seat to earning money including working two jobs.
Hi: You may also be interested in this related special report on Amazon: https://wfmonitor.com/2022/02/28/amazons-upskilling-initiatives/