TJ interviews: InStride’s Jonathan Lau

Despite the pandemic and the weak economy businesses continue to invest in workforce education. TJ’s editor Jon Kennard talks to chief learner officer and co-founder at InStride, Jonathan Lau to get a stateside update.

For some context, tell us about the Upskilling and Retraining Assistance Act.

We recently surveyed business decision-makers and learned that 96% of them agree that investing in ongoing employee education can drive business growth. At the same time, nearly seven out of 10 leaders (68%) are concerned about widening skills gaps in their organisations. This problem has been magnified by the workforce disruptions from the COVID-19 pandemic.

The U.S. Upskilling and Retraining Assistance Act is a bipartisan bill that would ensure job seekers and employers have access to resources necessary for the 2020 economy and beyond.

It would do this, in part, by increasing the amount of tax-free educational assistance available to employees in workforce development programmes and by covering expenses such as tools and technology related to remote learning.

The current tax code only allows employers to pay up to $5,250 for employees’ education programmes without it counting towards the workers’ taxable income. This cap was created more than 30 years ago and as a result, limits corporate investments in employee education today, placing more of the student debt burden on employees and the government.

The Act raises the amount of tax-free educational assistance to $12,000 for the next two years and is supported by a broad coalition of higher education institutions, large employers, and industry associations. Some of these include Jobs for the Future (JFF), the Business Roundtable (BRT), the Society for Human Resource Management (SHRM), and the American Council on Education (ACE).

In the survey you conducted, 96% of business leaders said that talent development was currently more a priority than reducing labour costs and investing in sales growth. Can you tell us a bit about the data set that you used to come by this remarkable stat?

We surveyed more than 500 business decision-makers, director-level and above, who work at companies that generated at least $250 million in annual revenue in 2019, to understand their workforce development priorities.

Strategic education programmes also impact business strategies, as they create talent recruiting and retention advantages, which reduce the high costs of employee turnover. 

There were several insightful takeaways. We found that 96% of decision-makers ranked investing in new technology and talent development as their top two priorities in the current economic environment. They ranked those as higher priorities than product development, sales growth, and reducing overhead costs.

It was also encouraging to see that 88% of all respondents said their company offered an employee education programme prior to COVID-19 and that a majority (80%) would continue to do so next year. And 92% of the decision-makers we surveyed agreed that a strategic workforce education programme should help an organisation meaningfully achieve its diversity, equity and inclusion (DE&I) goals.

What are companies like Starbucks and adidas doing that are making a difference to their workforce?

Starbucks and Uber were early pioneers of strategic education programme design, and other companies such as adidas, Aramark, Banfield Pet Hospital, Prime Communications, and Desert Financial Credit Union have continued that momentum.

What they have in common is the recognition that employee education is central to their social impact mission. Strategic education programmes also impact business strategies, as they create talent recruiting and retention advantages, which reduce the high costs of employee turnover.

These programmes also provide a targeted way to address employers’ current and future skills gaps or become more competitive in certain areas of the business. And there are brand reputation advantages, as employees and customers tend to look favorably on businesses that invest in their people and provide future growth opportunities.

For example, The Starbucks College Achievement Plan (SCAP) with Arizona State University provides eligible Starbucks partners (employees) an opportunity to earn their first bachelor’s degree with 100% tuition coverage.

Nearly 5,000 partners have graduated from the programme, earning their degrees while working. Furthermore, 75% of Starbucks stores have at least one partner in the programme and the promotion rate of SCAP retail participants is three times that of non-participating partners.

Starbucks also notes that nearly 20% of new job candidates cite SCAP as one of their primary reasons for applying to work at the company.

The way similarly-minded companies approach workforce education strategically is by first identifying the business objectives they need to address and then mapping the most relevant academic offerings to those needs. For example, some companies are looking to attract and retain talent, so they have designed programmes that allow employees to pursue any kind of degree they choose.

Others, such as Banfield Pet Hospital, recognised the need for skills development in certain areas, such as STEM, so their offerings address those specific priorities. Regardless of their objectives, all of these organisations see investing in employee development as an asset that’s integral to their business, which results in greater active participation among their employees.

Finally, they hold their programmes accountable with meaningful KPIs that track student enrollments, degree or certificate completions, and the short- and long-term impacts of their talent investments on the organisation.

For smaller companies without such resources, how can you retrain and reskill to remain competitive?

Strategic enterprise education principles hold true for organisations of any size. It starts with a senior-level commitment to invest in people and recognition that workforce development has to be a core element of business strategy.


About the interviewee

Jonathan Lau is chief learner officer & co-founder at InStride


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