The Target Corporation announced Wednesday that it would pay for the full cost of college for its employees. The offer covers more than 340,000 U.S.-based employees and constitutes what Target called “the most comprehensive debt-free education assistance program available in the retail industry.”
The offer begins this fall, making all part-time and full-time Target employees eligible for company-paid tuition for hundreds of undergraduate degree and certification programs. The deal also will provide free textbooks, pay for course fees, and cover other incidental educational expenses.
The new educational benefit will apply to employees on their first day of work. It’s estimated that the program could cost Target at least $200 million over the next four years.
“Target employs team members at every life stage and helps our team learn, develop and build their skills, whether they’re with us for a year or a career. A significant number of our hourly team members build their careers at Target, and we know many would like to pursue additional education opportunities. We don’t want the cost to be a barrier for anyone, and that’s where Target can step in to make education accessible for everyone,” said Melissa Kremer, Target’s chief human resources officer.
She added, “our team members are the heart of Target’s strategy and success, and we have a long history of investing in industry-leading pay, extensive benefits and career opportunities to help our team thrive and have rewarding careers at Target.”
Target’s announcement comes just a week after Walmart, the nation’s largest private employer, announced that it would pay for 100% of college tuition and books for all its part-time and full-time employees. And it continues a trend by the retail sector of offering increasingly generous educational assistance programs.
Target is mounting its new educational benefit with the assistance of Guild Education, one of the nation’s largest managers of upskilling and employee education assistance programs. According to the company’s announcement, employees will be able to take courses “at more than 40 schools, colleges and universities, choosing from an industry-leading 250 business-aligned programs from Business Management and Operations to IT, Computer Science, Design and more.”
Examples of institutions included in the partnership are the University of Arizona, Oregon State University, University of Denver and eCornell along with such Historically Black Colleges and Universities as Morehouse College, and Paul Quinn College.
Target employees who want to pursue degrees in fields outside of the specified business-aligned programs in the Guild network will still receive tuition support. Target will pay up to $5,250 annually for sub-masters degrees and up to $10,000 for master’s degrees each year.
According to the company, the new education assistance benefit is part of Target Forward, a new corporate strategy, unveiled earlier this summer, that aims – among other goals – to create an equitable and inclusive workforce. It also complements several other Target programs designed to support the health, safety, well-being and career development of its workers, including recognition bonuses, free virtual doctor visits, and free mental health counseling services.
While most major companies offer some kind of educational assistance program to their employees, the take-up rate of such perks has been low historically. With the onset of the coronavirus pandemic, it was anticipated by some industry pundits that companies would cut back on their educational benefits in an effort to trim costs.
That fear appears to not be playing out. In fact, InStride, another leading company that helps organize employer-provided educational benefits, has reported significant growth since the pandemic began, adding new partners on both the educational provider side and on the corporate business side.
The latest moves – first by Walmart and then by Target – illustrate how competitive the labor market has become as the economy’s bounce-back continues. Many businesses report being desperate to hire and retain enough workers. At the beginning of the summer, U.S. job openings rose to an unprecedented 9.3 million, according to the Bureau of Labor Statistics.
There are several reasons why employers are struggling to hire workers – inadequate compensation, difficult working conditions, lingering concerns about Covid-19, and perhaps the availability of enhanced unemployment benefits. Whether employer-provided free college will be the lure that turns this problem around remains to be seen, but it’s a bold move on behalf of workers, and it’s a strong signal of businesses’ belief in the value of college.