Dive Brief:
- One week after rival Walmart announced plans to expand its college reimbursement program for U.S. associates, Target said Aug. 4 it will offer all U.S. front-line employees "debt-free assistance" with certain educational costs.
- Target will offer the benefit through Guild Education, the same vendor used by Walmart. It includes financial assistance toward certain undergraduate degree, certificate and certification programs including payments for textbooks, all without out-of-pocket costs to the employee. Target said it would provide up to $5,250 in direct tuition payments for non-master's degrees and up to $10,000 for master's degrees each year, separate from payments for educational supplies.
- Employees can choose from more than 40 schools, colleges and universities and from 250 "business-aligned programs" when using the benefit. The benefit is immediately available to workers in Target's stores, distribution centers and headquarters locations on their first day of employment, the company said.
Dive Insight:
Escalating competition on non-wage employee benefits between the two retailers may reflect a broader set of difficulties attracting talent.
Employment in the nation's retail trade sector changed little last month despite gains in May and June, according to the U.S. Bureau of Labor Statistics. The sector lost approximately 6,000 jobs and is down 270,000 jobs from February 2020.
Caution among job seekers may be driven in part by the spread of the delta variant, Neel Kashkari, president of the Minneapolis Federal Reserve Bank, told CBS News in an Aug. 1 interview. Apart from health concerns, people who are out of work also may be concerned about childcare issues, although unemployment benefits may also be a factor, Kashkari said.
Tuition reimbursement and other forms of education-related benefits experienced growth before the pandemic, however, with Walmart introducing its Live Better U program via Guild Education in 2018. Since that time, a number of large brands have partnered with Guild, including Waste Management. That company said it would offer U.S. employees access to more than 170 fully-funded programs, including those for undergraduate and graduate degrees as well as certificates and high school completion.
This type of benefit is expected to grow even further in the near term, according to Willis Towers Watson. The firm's May survey of employers found 94% of employer respondents said voluntary benefits would be an important part of their total rewards strategy over the next three years. Tuition reimbursement also is one of the most common forms of voluntary benefit offering among employers, next to hospital indemnity insurance, pet insurance and financial planning, the survey showed.
