Walmart offers some of its workers a new perk: Subsidized college

Last Updated May 31, 2018 10:04 AM EDT

Walmart is offering its 1.4 million employees in the U.S. a new perk: affordable access to a college degree.

America's largest private employer, which in the past has helped its workers get their high school degrees or GEDs, hopes the new benefit will help it recruit and retain higher quality entry-level employees in a tight U.S. labor market.

The retailer is teaming up with Denver-based startup Guild Education to offer employees the chance to obtain a bachelor's degree in business or supply-chain management. It will offer a choice of three non-profit universities with online programs: the University of Florida, Brandman University and Bellevue University. All three have had success working with adult learners.

The program will cost employees a dollar per day of classes, regardless of course load, a spokesperson for Guild said. That translates into about $75 per semester.  

The retailer plans to eventually expand to more types of degrees. It will also offer college-prep classes for workers who need extra help bridging high school and higher education. Walmart is subsidizing the cost of tuition, books and fees, eliminating the need for student loans.

Both full-time and part-time workers who have been with the company at least 90 days will be able to qualify, Walmart said. About 68,000 of Walmart's 1.4 million U.S. employees are expected to enroll in the first five years, based on interest from its workers, said Julie Murphy, executive vice president of people at Bentonville, Arkansas-based Walmart.

"We know training and learning opportunities empower associates to deliver for customers while growing and advancing in their careers," Walmart CEO Greg Foran said in a press release. 

The move underscores how retailers, restaurant chains and other service businesses are under increasing pressure to improve the skills of their entry-level workers at a time when their jobs are getting more complicated due to the rise of online shopping, steeper competition from Amazon and more demanding shoppers.

The partnership with Guild Education, which was founded in 2015, goes beyond Walmart's current program covering the cost of workers and eligible family members for earning a high school diploma or GED equivalent. The company also grooms managers at its Walmart Training Academy, and has a career program for entry-level workers.

Guild Education works with other national chains, including Chipotle Mexican Grill, Taco Bell and Lowe's, on their employee education programs. But Rachel Carlson, CEO and co-founder of Guild Education, says its partnership with Walmart is unique in several ways, including its low upfront costs.

Walmart's move puts it in the corporate benefits league of Starbucks, which three years ago began offering four years of tuition for an online college degree from Arizona State University.

The college program follows Walmart's announcement in January that it would raise the starting wage for employees from $9 to $11 per hour and give some employees bonuses of up to $1,000.   

Another sign of change in a tight labor market: Walmart is also considering loosening the dress code that employees at its roughly 5,000 U.S. stores are required to follow. Under a pilot for the new policy, workers at 100 stores are being allowed to wear blue jeans, provided they are solid blue, and may wear a solid-color shirt of their choosing, a company spokesman said. Walmart's current dress code only permits khaki-colored or black denim pants and solid blue or white shirts.