With unemployment near historic lows, companies have struggled to fill open positions which makes holding onto employees even more important. Some companies including Walmart and Target have raised wages across the board in order to attract and retain employees while others have added benefits to keep workers from leaving.
Yum! Brands' (NYSE:YUM) Taco Bell has become the latest company to offer expanded benefits for its employees. The company has broadened a pilot program offering education support to all 210,000 employees across 7,000 restaurants in the United States.
What is Taco Bell doing?
From its launch, the program, a partnership with Guild Education, will offer employees personalized college advisors as well as discounts at 80 online universities offering everything from high school completion to data science certificates to master's degrees. The advisors will help employees with financial aid forms, selecting the right school, and offer general support.
In addition, the restaurant chain, working with Guild and its partner schools, will offer college credit for on-the-job restaurant training. Corporate employees and workers at participating franchises will also be eligible for up to $5,250 in tuition assistance per calendar year, which the company noted would be "paid up front so employees don't have any out of pocket costs," according to a press release.
The paid up-front line is likely a subtle dig at Starbucks, which offers free online college degrees for employees but only reimburses workers after they initially pay for and complete the courses. The coffee chain's program is also geared toward helping employees finish earning a college degree rather than starting one from scratch.
Why is Taco Bell doing this?
The pilot test of this program involved 2,000 employees and resulted in a 34% increase in retention of employees enrolled for a six month period. That's an important result for a chain that expects to add 100,000 new positions in the U.S. by 2022.
"When we surveyed our employees, education support was one of the top three things they asked for," said Taco Bell Chief People Officer Frank Tucker. "The barriers to achieving their education goals were time, money, and support. Our partnership with Guild delivers on all of these needs for our employees through access to online classes, financial aid guidance, tuition assistance and a personal counselor to support each student in real time."
Will this help?
It's fair to say that Taco Bell is competing for a shrinking pool of workers against companies including Target and Walmart. This type of benefit costs less than paying employees more but produces a strong retention result. It also fits well with the company's overall efforts to give employees a career path with the company.
The chain already offers what it calls the "Start With Us, Stay With Us" platform," designed to offer career-building opportunities and education. The new program fits nicely with that benefit and if employees enroll in a degree program, they are likely to stay until they finish school. Once they do that, some will leave, but others may work their way up with the company as their new degree opens up advancement opportunities.
Ultimately, tuition reimbursement and education benefits are one piece of a bigger puzzle. Taco Bell, however, deserves credit for testing, then implementing a program that seems to benefit both employees and the company.