Frontline workers account for more than 70% of the workforce in the U.S., but they’re often overlooked by employers when it comes to meaningful investments in learning and development.
EdAssist by Bright Horizons recently led a SXSWedu panel alongside talent leaders from McDonald’s and T-Mobile, two organizations that are leveraging tailored education benefits to meet the career advancement goals of their frontline employees.
Instead of simply checking off a box, both organizations shared how they truly make these benefits accessible to a demographic that has numerous obstacles when it comes to navigating continuing education and future career paths.
As a result, they are addressing labor shortage issues and improving retention rates by building internal talent pipelines through innovative employee education programs.
Economic impact of frontline employees and demographic challenges for retention and growth
Frontline workers are employed across every sector and represent a tremendous portion of the economy, performing essential tasks to keep the world running daily.
However, organizations with large populations of frontline employees face an ongoing problem: astounding turnover rates. Depending on the industry, that rate may be as low as 30% or run as high as a staggering 75 to 80%. While this issue has previously been addressed by simply hiring replacement talent, the U.S. labor market is entering a period of declining birth rates that’s now evident within the emerging working-age population.
“Historically, the way companies dealt with turnover was replacement,” said Diane Bartoli, Senior Vice President of Education Advisory at Bright Horizons. “There was a steady line of folks behind them, but we are reaching a demographic cliff that has an implication for the workforce.”
Following the Great Recession of 2008, national birth rates declined 4% – a 30-year high at the time. In most years since then, the birth rate has continued to decline, indicating that the problem of a smaller workforce is here to stay. In other words, churning through frontline employees is no longer an option for companies that want to remain competitive in today’s labor market. “The premium on retaining and developing talent is only going up,” remarked Bartoli.
The disconnect between frontline workers and employers
There’s clearly a high level of dissatisfaction leading to such high attrition rates. So, what do frontline workers want? According to EdAssist data, 71% want to develop their skills and 77% want to pursue education. This demographic is looking for opportunities to advance their careers, but many employers don’t offer accessible education programs. If they do, promotional efforts are often less than stellar.
In fact, there’s a huge perception gap between employers and employees. According to research from McKinsey, only 17% of frontline workers report having regular career discussions with their managers, while 40% of employers believe these touchpoints are indeed occurring.
Similarly, 14% of frontline workers say they know about internal career paths, while 35% of employers report articulating those paths to employees. While 32% of employers offer a tuition benefit, only 15% of frontline workers are aware of them.
These data points reveal a large delta between what frontline workers experience and what management believes is happening.
How McDonald’s increases retention, promotions, and sales with Archways to Opportunity
McDonald’s Corporation has developed a robust employee education benefits program over the past decade in partnership with EdAssist. Archways to Opportunity, which is celebrating its 10th anniversary, has four key components to address the diverse needs of more than 900,000 employees working in restaurants across the U.S.
“Because of our size and scale, we knew we could have an impact on education and skills gaps,” explained Lisa Schumacher, Director of Education Strategies at McDonald's Corporation. “So we set out to design a program that really meets people where they are, knowing that folks in our restaurants maybe don't speak English as their first language, maybe didn't graduate from high school, and maybe are a first-generation college student.”
The Archways to Opportunity program includes:
- English Under the Arches: Provides English language instruction with a focus on the words and phrases commonly used in McDonald’s and the restaurant industry. Cohort-based courses include live virtual classes and self-paced e-learning.
- High School Diploma Program: This high school completion program is designed for working adults, with multiple career tracks to choose from and success coaches to guide them through the process.
- Affordable Paths to College: McDonald’s partners with several universities and provides success coaches and trained admissions counselors who know McDonald’s tuition reimbursement process. Tuition assistance is available to all restaurant employees who have worked at least 90 days and work an average of 15 hours per week. Benefits can be used at any accredited institution.
- Advising Services: McDonald’s offers college coaching to employees and their immediate family members.
Since the launch of Archways to Opportunity, McDonald’s has provided $230 million in tuition assistance and increased education access to over 90,000 restaurant employees. Scarlett Morris, People and Development Lead at McDonald’s, is an Archways to Opportunity graduate who started working at her local McDonald’s franchise as a 17 year-old crew member.
Using tuition assistance and success coaching, she graduated Summa Cum Laude with a Bachelor’s degree in Business Administration, focusing on Human Resources, from Colorado Tech University.
“Sometimes you don’t take a chance on yourself,” said Morris of her decision to pursue a college degree. “But when you have McDonald’s and Archways and your owner-operator betting on you, you don’t have anything to lose.”
For Morris, McDonald’s and the Archways to Opportunities program is a family affair. Her husband and daughter have both utilized the tuition assistance benefit, and her teenage son joined the organization last year. “Knowing that I have the support system of McDonald’s, is like a family in a way – a McFamily,” Morris shared.
McDonald’s investment in frontline worker education has reaped a clear return. Participants are two times more likely to be promoted and have a 2.5X higher retention rate than employees who don’t enroll in Archways to Opportunity.
Additionally, the company saw a correlation between restaurants with Archways participants and sales increases averaging 1%, which, Schumacher points out, is a substantial figure at McDonald’s. The corporation also recently switched to a shared cost model in which franchisees cover 50% of tuition assistance costs. When this change took place, 92% of franchisees signed the agreement, indicating the clear value of education benefits programs for all stakeholders.
How T-Mobile champions marginalized communities while reimagining education benefit success metrics
T-Mobile has over 70,000 employees nationwide and in many areas, the company is the largest employer. Call centers employ 50,000 frontline workers who are often located in marginalized communities. For years, T-Mobile has resisted the standard churn and burn approach to retention and instead crafted a benefits program that is accessible, usable, and functional specifically for this demographic.
“At other companies, tuition assistance may be available, but the reality is that a lot of people can’t float a reimbursement model,” explained Kate Blaylock, T-Mobile’s Senior Director of Employee Benefits. “We moved to a direct pay model to equalize the benefit and saw a giant leap in participation – especially among our frontline employees.”
Tuition assistance is available after 90 days of employment. Part-time employees receive up to $2,500 per year and full-time employees receive up to $5,250 at any accredited institution for any type of program, it doesn’t need to be related to T-Mobile operations or opportunities.
Additionally, the company partners with ten schools that offer fully covered tuition to employees by writing off expenses above and beyond T-Mobile’s contribution. The results have been life changing for many team members. That passion is evident in the fact that the program’s success largely comes through word of mouth; it’s the benefit that people regularly talk about in their departments and at career fairs.
For T-Mobile, success has been measured by community impact. “When we think about our program, it is really about investing in our people and showing up in the communities that we’re in,” says Blaylock. “We take that responsibility incredibly seriously. We choose to be the employer that invests in, helps create leaders in the community, and lifts people up.”
The HR analytics team is developing new measures of success, in addition to retention and community impact, such as changes in employee survey results and call center sales statistics.
Teams from development and HR are also working with senior leaders to identify the skills and abilities that will be needed within the company in the next three to five years. The goal is to build an internal pipeline for future needs surrounding A.I. and other emerging skills. “We would rather not hire externally, so we make sure they have an understanding of and investment in our business,” Blaylock said.
While T-Mobile doesn’t plan to change the flexibility and choice of the existing benefits program, the company plans to make a workforce plan with distinct career paths.
Retain and engage frontline employees with results-oriented education benefits
The commitment of McDonald’s and T-Mobile to their frontline employees highlights the significant benefits of tailored education programs.
By making these programs accessible and relevant, these organizations are not only addressing labor shortages and retention challenges but also fostering a culture of growth and development. This approach benefits the employees while strengthening the overall workforce, ensuring long-term success and competitiveness in an evolving labor market.
Investing in frontline workers is not just a strategic move; it's a commitment to building a brighter future for both the employees and the organizations they serve.
