When College Becomes a Benefit of Employment
These days working in a fast-food restaurant or other service-industry job often comes with a new benefit: a college education.
More employers at least are offering tuition assistance to workers or even letting them take courses for free. Big-name companies are doing this—think Starbucks, Walmart, Chipotle and McDonald's to name a few. Companies are hoping the move will attract workers and keep them from leaving so quickly; for colleges, these efforts can be a source of new students, especially for new online programs.
For a sense of how big this trend is, consider Guild Education, a startup that helps set up and run these education benefit programs by connecting big companies and colleges. It's now a unicorn, meaning it's valued at more than a billion dollars—that makes it one of the highest valued education companies out there.
But how well do these education-as-a-benefit programs work, and who do they work for?
This is part two of our two-part series tackling these questions. Last week we looked at how algorithms have changed the culture of low wage and service work in recent years. Our guest for that was Emily Guendelsberger, who recently spent time working several of these jobs, including a month behind the counter in a McDonald's restaurant for her new book, "On The Clock"—and the picture she paints isn't pretty, at least from a worker's perspective. The problem she says is that today’s service and fulfillment jobs are increasingly being designed so that anyone can do them with very little training. The practice essentially treats employees like robots, tracking their productivity in ways that she found oppressive.
“If you are constantly watched for every second of possible slack time that you have, your life is miserable,” says Guendelsberger. “I don't care what you do. I don't care how much you like your job, it is miserable and people shouldn't have to live that way.”
This week we'll hear from folks running these new programs. They argue that they’re the answer to dealing with the challenges of how automation is changing the world of work.
I first connected with Lisa Schumacher, director of education strategies at McDonald's. The company calls its program "Archways to Opportunity." I wanted to hear her response to the argument made by Guendelsberger, that today’s service jobs have been made overly robotic with the rise of algorithms.
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“I was in a restaurant just a couple of months ago for four or five hours and that’s certainly not the experience I had,” she says. “It is efficient and it needs to be. People who are coming through our drive through at busy times who also have hard jobs and have not a lot of time to spare at lunch certainly want that food to come to them quickly. But you know I spend a decent amount of time with our franchisees. They are for the most part small business owners and again the experience I have is that they care very much about the restaurant employees. They, in many cases, are like family to them.”
That’s a big contrast to how Guendelsberger describes the same jobs. But from the point of view of this McDonald's executive, the goal is to use technology to make things more human and make the job a better stepping stone to a future career.
“At McDonald's, we talk about that we're committed to being America's best first job,” says Schumacher. “And so the question I often ask people is, ‘How many people had a first job?’ Everybody raises their hand of course. ‘How many of you had a first job in retail or in food service?’ And many people raise their hands. People learn a lot in their first job. Those soft skills or power skills or work-readiness skills are [what] we call things like showing up for work on time, being in the right uniform, working well with your coworkers, customer service skills, listening, dealing with difficult customers.”
But in “On the Clock,” Guendelsberger argues that these jobs are becoming “de-skilled” because there’s so much automation leading workers.
Schumacher says that since McDonalds has added new services like a kiosk where people can order and have the food brought to their table, there are new hospitality skills that workers now learn.
Of course, there are plenty of forces driving places like McDonald’s to offer tuition benefits to their workers. Just last month, the Strada Education Network released a report on the new learning ecosystem, looking at the broader employment landscape and arguing for building an education-to-employment system where colleges, employers and nonprofits come together to help more people advance from low-wage work to more stable careers through education.
Michelle Weise, the senior vice president for Workforce Strategies and the chief innovation officer at Strada says today’s scattershot approach just isn't working.
“For so many decades, we've had systems that have existed as silos,” Weise says. “If you think about our K-12 system, our post-secondary system, our workforce training systems, they have functioned in this way where they're not really communicating or working together in service of the learner. ... People are realizing that the impact of what they're doing within these separate systems doesn't necessarily seem to be making it easier or more easily navigable for learners to navigate any sort of job transition.”
She praises the work of employers like McDonald’s, but she says that a better scaffolding needs to be built and that colleges need to change their offerings too, in order to really make these education benefits something that more workers actually use.
“For people who are not thriving in the labor market, they are stitching together a lot of different jobs to make ends meet,” Weise adds. “It's hard for them to take on an extra layer of complexity. And even if it's a free opportunity from their employer to pursue a two or a four-year degree, say, it doesn't get at this idea of, ‘What is the precise skills or competencies that I need to build so that I can actually make my way into a better job so I'm not necessarily stitching together four or five different jobs to make ends meet?’”
In fact, typical participation rates in these programs are in the single digits— just 5 percent of qualified workers are actually using them in a lot of places. As part of the research for its ecosystem report, Strada interviewed low-wage workers to see what they needed from an education benefit.
Strada's work is an example of the energy and resources and attempts to change things around workforce and education. But there is also the rise of Guild Education, that unicorn company connecting colleges and employers, to contend with.
“You look back on the history of other benefits, and often they were driven by some sort of market force, or a desire to either enhance an employer experience or drive to parity,” says Guild’s CEO and co-founder, Rachel Carlson. “I think healthcare is a great example of a parity benefit, where employers have all offered it because others have. And in fact, the public sector did it first and then the private sector followed in the ‘60s. I think education benefits are a really unique version of benefit and it's why we talk about it as being more than a benefit, because it actually creates an ROI for the employer as well.”
Of course the idea of an education benefit is not totally new, but Carlson's company, and others that have come around in the past few years, are trying to make it easier for more people to actually take advantage of these programs.
“We did a lot of research on this, and the biggest obstacle was the model of tuition reimbursement,” she says. “So by asking the employee to pay upfront and then waiting for the employer to pay them back, you think about if that was the case with healthcare, right? ‘Hey, I'm pregnant.’ ‘Okay, cool. You need to pay the hospital upfront and we'll reimburse you in December.’ That'd be untenable. And that's effectively what we were doing with education benefits prior.”
“And so what happened was only corporate officers and wealthy white collar workers were using the benefit,” she adds. “And so the key difference that we found, and by unlocking opportunity, what we've been able to do is connect the universities and the employers directly.”
But what about the challenges that workers face due to scheduling algorithms?
Lisa Schumacher, of McDonalds, says that the decisions of what tools to use to schedule workers is made by individual restaurant owners, not McDonalds. “Flexibility has always been something that McDonald's and our franchisees have been proud of,” she adds. “The conversations that I have with our franchisees is that they are eager to have students working in their restaurants, whether that's high school students or college students, and they understand that there is a need to schedule around things like classwork.”
We also asked Rachel Carlson of Guild what she thought of the scheduling concerns raised by our guests last week.
“I think that's a completely fair concern,” she says, adding that her company does not work with either McDonald’s or Amazon, another company Guendelsberger spoke about. “I think there's a movement around fair scheduling that's really important. And so zooming out more broadly as we think about the stability of frontline workforces, ... we've got a number of companies who've been really deliberate about moving to a model where the employees get weeks or months insight into their upcoming schedules and it makes a really big difference.”
Everyone I talked with thought something needs to change as far as how these service jobs function in our broader economy. And there's definitely not a consensus yet on what that change should be exactly. If there's one takeaway from this series, it's that the dream of expanding college access by partnering with employers is hard to pull off. It's hard for the colleges, the workers and the businesses who all have different and sometimes conflicting priorities.