Todd Pruzan, HBR
Welcome to the HBR Video Quick Take. I’m Todd Pruzan, senior editor for research and special projects at Harvard Business Review. Today, I’m with Terry McDonough, president of education technology services at Strategic Education, Inc., one of the world’s largest education companies dedicated to enabling economic mobility through education. Terry is responsible for developing effective employer education partnerships and administering employer-sponsored education solutions that support working adult students by helping them advance in their careers. Terry, thank you so much for joining us today.
Terry McDonough, Strategic Education, Inc.
Yeah. Thanks for having me.
Todd Pruzan, HBR
Terry, what are education benefits, and why do they matter to employees and employers?
Terry McDonough, Strategic Education, Inc.
Education benefits typically refer to tuition assistance programs that employers provide to pay for or subsidize employees’ education. Employers like them because they allow the employer to stand out and attract or retain top-quality talent. Employees or prospective employees like them because they provide a means to access education at a much lower cost and build skills that make the employee more marketable in the labor market. They matter, really, because they allow employers to operate more effectively in what’s currently a very tight labor market. And also they allow, societally, us to reduce the debt load associated with post-secondary or higher education tuition, which we all know is a big burden on our economy at the moment.
Todd Pruzan, HBR
So, what are the options that employers should consider when they’re developing an education benefits program?
Terry McDonough, Strategic Education, Inc.
Really, employers need to think about four things. One is, who are they going to make the program available to? If an employer, say, for example, wants to build a full-scale culture of learning, many employers will make tuition assistance or education and benefits available to everybody. Others may seek to prioritize a different set of roles that may be in high demand and they want to attract talent for. So, who do you want to make the program available to?
Second is, what are the offerings or the programs that you might want to provide? It’s important for employers to provide a diversity of programs that their employees can get access to, both degree programs and non-degree programs. Degree programs typically support long-term employee retention. Non-degree programs, like coding boot camps, certificate programs, and the like, typically allow the employer to build skills or the organization’s skills faster.
The third thing that they should think about, in addition to . . . the types of programs they have in the network, is how employees might access those programs. They might have a single portal through which the employees could search the marketplace of education offerings available to them, making it easier for employees to know what’s there, what they can actually pursue and are eligible for. And then, finally, how are they going to track the effectiveness of the program? Are they able to tie an employee’s use of the program to subsequent promotions or better performance over time?
Todd Pruzan, HBR
So how can employers increase uptake by employees?
Terry McDonough, Strategic Education, Inc.
Well, there’s a couple of things that you can do. First off, ensure that employees know the programs are available to them. It’s surprising—even as prospective employees and current employees typically say education benefits are amongst the most important benefits that they seek from an employer, many don’t actually know they exist. They don’t know their employer provides them. So, making employees aware that they have the benefit and making it easy for them to access that benefit through something like an employer portal, where the employee can go and see the potential opportunities to enroll in education that they might have and the ways that it might get funded by their employer—that’s one thing they can do.
Two is thinking about the way they actually provide funding for those programs. Employees are typically drawn to programs where they may not have to pay any out-of-pocket cost for their education offering. So, that might mean the employer setting up a direct payment arrangement with education partners so that the employee doesn’t actually have to pay anything out of pocket to enroll in select programs. It may be negotiating discounts with a network of education providers who meet a quality bar and have a program set that aligns with the organization’s skill needs. So, those are two of the things that we see progressive employers doing to really make it easier for employees to take advantage of their education benefit programs.
Todd Pruzan, HBR
How can employers measure the impact of their education program?
Terry McDonough, Strategic Education, Inc.
It’s important to think about the education partner that an employer would work with. Typically, finding a partner who understands the business performance metrics that matter and how to understand if the partner—the employer partner—is improving on those metrics by means of making education available is an important element to think about. Some employers will work with education partners who bring a consortium of high-quality, in-network education providers, degree programs, and non-degree programs, but [will] also allow their HR department or talent managers to track the effectiveness of those programs to know who’s enrolling in what functions and geographies, [and] what does their employer, their performance, and [their] employment status look like over time. This links the use of education and skill development to the long-term trajectory of that employee with the company or the team that’s accessing the benefit. So, there are educators and platform providers who will do that work in concert with the employer. And it’s important for the employer to really find those types of partners in order to track the effectiveness of their programs.
Todd Pruzan, HBR
Terry, this has been a great conversation. Thank you so much for joining us today.
Terry McDonough, Strategic Education, Inc.
Thanks so much. It’s been a pleasure to be here.