Want To Keep Employees? Educate Them
Entrepreneur|December 2019
Franchises struggle to attract and retain good entry-level workers. That’s why many are starting to pay for their employees’ education. The results are good—but franchises still have a lot to learn.
Jon Marcus

When a customer buys something at Taco Bell, they’re asked if they’d like to round up their purchase to the nearest dollar. They’re told it helps support their employees’ education, but of course, that can seem abstract and perfunctory to someone just hungry for a chalupa. So when someone does round up their purchase at a Taco Bell in Bloomington, Ind., employee Megan Humphreys-Savell always makes a point of smiling and making it personal.

“I tell them, ‘Your donation helped me go to school,’ ” says Humphreys-Savell, 20. Those pennies have, among other things, helped contribute to a $25,000 scholarship she received through the franchise’s foundation; now she’s enrolled at the nearby Indiana University, majoring in arts education. “They’re definitely surprised,” she says of customers’ reactions. “I just don’t think they’d ever given it a second thought. I love to see their faces when I tell them that.”

Humphreys-Savell was in foster care from ages 12 to 14, when she was adopted by a family with three other children. A college degree had always seemed financially out of reach, but she was determined. It’s why she originally took a job at Taco Bell—though she had no idea about its educational benefits. At the time, she was just trying to earn some cash to pay for classes at a local community college. Then she discovered she could apply for a Taco Bell Live Más scholarship, did so, and became one of 531 people (selected from 13,000 applicants) in 2019 to receive the help.

Across the franchise world, her story is becoming common. An increasing number of franchises have started to offer education benefits for full- and part-time employees, ranging from college tuition assistance to English language instruction and high school equivalency programs. And it’s happening because these businesses have discovered something seemingly counterintuitive: Spending money on their employees’ education— and therefore providing access to opportunities far larger than their current jobs—isn’t just good for employees. It’s also good for business.

“If you look at how competitive it is in the hourly workspace, it’s become table stakes to have these kinds of programs,” says Bjorn Erland, Taco Bell’s recent vice president of people and experience. (He left the company in October.) The results, so far, are undeniable: In a 2017 pilot at 700 restaurants, Taco Bell saw a 34 percent increase in retention over the first six months among employees who received its educational benefits.

“This is the next movement,” says Rachel Carlson, CEO and co-founder of Guild Education, which helps run education programs for customers ranging from Walmart to Walt Disney and is now branching into the franchise sector.

“If the ’60s were about healthcare and the ’80s were about 401(k)s, education is the new employee benefit,” she says. “Franchises are thinking, How can we compete? And [underwriting education offers] a high return on investment.”

HERE’S THE statistic that tells the story: Ten years ago, employers spent $13.8 billion (adjusted for inflation) helping their employees pay for a college education. Today, it’s nearly $16.5 billion, according to the College Board. Part of that increase is thanks to a particularly sharp rise in the benefits available to low-wage workers, who have gotten harder to find and keep as unemployment rates fall.

The movement began outside franchising, in some of America’s most heavy-hitting brands. Among the first to dive in was the nation’s largest private employer, Walmart, which in 2012 offered to pick up 15 percent of its employees’ costs to attend a for-profit online university. (It has since expanded the perk by covering even more of the tab for workers who pursue degrees in business, supply chain management, technology, or health and wellness, and by adding to the number of colleges where they can do it.)

Next came Starbucks, which began to pay for the cost of degrees for its baristas through the online arm of Arizona State University. Other big businesses followed; now even Uber is offering its drivers and their relatives a free ride through ASU’s online division.

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