InStride, a downtown-based company that designs workforce education programs, got a boost during the pandemic.

LABOR: InStride says it’s key to retaining employees.

When businesses are looking to reduce costs and increase talent in their workforce, high turnover rates may be the first thing to address. Post-pandemic, more companies began to look at offering workforce education programs to encourage staff retention and attract new job applicants.

One company that provides businesses with these programs is downtown-based InStride. It partners with academic institutes to help corporate partners set up education tracks for employees.

Chief executive officer Jonathan Lau said InStride saw a significant increase in its cli

ents over the last three years, and that its compound annual growth rate has been above 35% over the last three years. It currently has more than 40 clients.

“(After the pandemic) we definitely saw that there’s a much deeper recognition around the need for equitable access to education,” Lau said. “The second thing is the recognition that, in general, your people matter and your business is powered by your people.”

Nick Greif, InStride’s vice president of go-to-market strategy and communications, said these paid education programs for employees can make job openings more enticing while decreasing attrition.

“The top three things that people come to us for, and talk about in their business objectives and their talent needs, are retention, attraction and upskilling,” Greif said.

InStride negotiates tuition rates with its partners, which include Arizona State University, University of Wisconsin-Madison and Mexico-based Universidad Tecmilenio. It then connects corporate partners with these tuition deals and receives a portion of the difference between the original rate and the discounted rate. Most of InStride’s income comes from this tuition revenue, in addition to implementation fees when launching a new corporate partner and occasional add-on fees for services such as technology implementations.

Dr. Alec Levenson, a senior research scientist at the USC Marshall Center for Effective Organizations, said that a business’s bottom line is to meet production or financial quotas, adding that a committed workforce is necessary to making that happen.

Accessibility and attrition

Education programs through workplaces aren’t a new concept, but many of their iterations aren’t very accessible. A common type of program involves tuition reimbursement, where the employee pays out of pocket for their education and is reimbursed by their employer.

“(Those programs) tend to privilege individuals who already have a strong education background and already have wealth, which tends to correlate with white collar workers,” Greif said.

Working for an employer who pays for your education may also mean having more flexibility around your school schedule. Levenson said that the difference between an employee working for someone who pays their tuition, versus simply paying them more, means their employer is likely to be more understanding about their course load and class schedule outside of work.

Some employers have clawback provisions mandating that an employee pay back some or all of their tuition should they not complete or pass their classes or if they leave the employer before a set time period.

Research has shown that workplace education programs reduce turnover among participants while they are in school, but that voluntary turnover may increase after that. Levenson explained that employees are more likely to stay at a company if they’re able to apply what they had learned after finishing their education.

Opportunity cost

There is benefit and a risk with these programs: on one hand, they can provide equitable educational opportunities for workers and improve team morale, but on the other the tuition costs may be problematic when finances are tight. While education may not be cheap for the employer, neither are the financial expenditures and time requirements involved in turnover: finding a new employee, training them and integrating them into an organization.

For jobs requiring some sort of certification or specialty training, such as a health care or technology position, there may be more job openings than there are qualified candidates. By working with an academic institution to provide certification courses, a company can upskill their existing workforce or create a better applicant pool.

One of InStride’s corporate partners is Amazon. Amazon has its own internal program, which it calls Career Choice, to pay for education, but drivers can’t use it, as they’re contract workers rather than direct Amazon employees. InStride acts as a middleman to set up an optional program for contract workers to join.

Guild Education, based in Denver, is another workforce education program designer. Chief executive officer Rachel Romer said that the majority of employees want to move into a new role but ideally stay at the same company. Offering a clear opportunity for growth and advancement gives that company a leg up in the market.

“In today’s labor market, the power dynamics have shifted,” Romer said. “Employees are now telling their employers, ‘Show me a pathway to grow within this company, or I’ll show myself the door.’”

Looking ahead

However, not all employees get the choice of whether or not they stay at a job. Several large companies are currently slashing their workforces, including Amazon. Last week it announced that it would lay off 9,000 employees in coming weeks, on top of more than 18,000 jobs that were cut in the fall.

Lau said that companies that have launched paid education programs have expressed positive feedback and wanted to continue them even if they were mulling or carrying out job cuts. Its corporate partner Piston Group recently expanded its program to include more degree options and greater tuition coverage, and Amazon’s education program for its drivers was launched in the fall.

“I think the reality is we’re in a market that has a tremendous amount of uncertainty and I think folks are still going to grapple with some of that” Lau said. “So I don’t think we’re immune to that. But I think the nice thing is we do have partners that really believe in this and continue to want to push this.”