There is an age-old debate over the purpose of higher education, whether it’s for “pure thought” or for “labor market preparation.” The optimal path generally lies outside of the absolutes. In today’s rapidly changing economy, both business and higher education can benefit from tighter collaboration. And the “end users”, the students who attend and will be the future workforce, are demanding it.
The Employer Perspective: A Growing Investment in Education
Businesses have made substantial investments in education benefits for their employees, with tuition assistance programs being a long-held benefit used for attracting and retaining key talent. A Bright Horizon study found that 79% of U.S. workers said that a tuition reimbursement program would make them more likely to stay with their employer. A Gallup survey indicated that 45% of millennials would switch jobs for tuition benefits.
While these programs were in high demand when the labor market was perceived as tight emerging from Covid, the more recent economic environment alongside the U.S. Administration’s position on education, federal funding and higher education shows some retrenchment. As recently as 2023, UPCEA research showed that corporate partnerships for employee education grew from 54% in 2022 to 68% in 2023. Despite employer enthusiasm, many employees do not utilize these programs, with only a small percentage taking advantage of tuition assistance.
Changes emerging in the future of work from the rapid expansion of AI will require that employers find ways to retrain and reskill their valued employees to ensure that their organizations are built to succeed. Aligning with higher education institutions can assist with building programs tailored to support them. Employees who have been trained in critical thinking and strategies of thinking will be better equipped to face uncertainty, evolving economic and business conditions and set organizations up for the economy of the future.
The Higher Education Perspective: Aligning with Market Needs
Colleges and universities often struggle to demonstrate the immediate return on investment (ROI) of their degrees. As Scott Galloway has pointed out, the value of higher education is being questioned, with many students opting for certifications and credentials over traditional degrees. Institutions need to evolve by integrating work-based learning, microcredentials, and competency-based education to provide flexible, career-aligned programs.
How Institutions Can Build Stronger Corporate Partnerships
- Offer Custom Programs for Employers
- According to UPCEA, 73% of corporate partners expect universities to create custom learning solutions tailored to their workforce needs.
- Institutions like Arizona State University (ASU) and Northeastern University have led the way with employer-driven learning initiatives, including ASU’s CareerCatalyst and Northeastern’s Apprenti partnership.
- Leverage Tuition Assistance Partnerships
- Guild, InStride, and EdAssist serve as intermediaries connecting corporations with educational institutions. Guild, for instance, has expanded globally to support employers like Chipotle and Best Buy, streamlining tuition benefits for employees.
- However, competition for these partnerships is fierce, with companies preferring institutions that offer scalable online programs.
- Expand Apprenticeship and Work-Based Learning Models
- Apprenticeships are experiencing a resurgence, with 92% of U.S. adults view them favorably, according to an American Staffing Association survey.
- The Maine Community College System is leveraging a $75.5 million investment to provide short-term workforce training programs for 70,000 workers, offering a model for other states.
- Improve Accessibility and Communication of Benefits
- While a third of working adults have access to tuition benefits, less than half use them.
- Institutions must work closely with HR and Learning & Development teams to simplify enrollment processes, reduce friction, and market education benefits more effectively.
- Stackable Credentials and Competency-Based Learning
- Maine and other forward-thinking states are leading the way in microcredentialing, making learning more modular and workforce-relevant.
- Colleges should prioritize competency-based education (CBE), allowing learners to progress at their own pace, directly addressing employer needs.
Economics Matter: Expanding and Contracting Employer Programs
To understand where employer-funded education is heading, we can examine three real-world examples:
1. Expanding: Amazon’s Career Choice Program
Amazon has committed $1.2 billion by 2025 to cover tuition for frontline workers, offering full college degrees, high school diplomas, and technical certifications. This initiative aligns with Amazon’s workforce strategy to retain talent and upskill employees for internal career growth.
2. Expanding: Best Buy’s Tuition-Free Degree Program
Best Buy now offers no-cost college degrees for both full- and part-time employees through Strayer University’s Degrees@Work program. Employees can access certificates, associate, bachelor’s, and master’s degrees from their first day of employment.
3. Contracting: Disney Aspire’s Funding Cuts
Disney was once a leader in employer-funded education, but recent budget cuts have reduced tuition support for bachelor’s programs and eliminated funding for master’s degrees. This illustrates that while employer tuition benefits are expanding overall, economic pressures can still lead to downsizing of corporate-sponsored education.
Standing out from the Crowd: How Institutions Can Leverage Corporate Partnerships
For colleges and universities, corporate partnerships aren’t just a workforce development tool—they’re a powerful differentiator in enrollment marketing. By highlighting direct career pathways, employer-backed tuition benefits, and flexible, work-aligned programs, institutions can:
- Attract new students who might not otherwise consider college.
- Re-engage adult learners who have paused their education.
- Differentiate themselves from competitors in an increasingly crowded marketplace.
Institutions that integrate learner-centered approaches, promote stackable credentials, and actively engage with employers will be best positioned to thrive in the evolving education landscape.
The Future of Corporate-Education Collaboration
The demand for skilled, adaptable workers continues to rise, and higher education institutions must adapt. Corporate partnerships present a win-win opportunity: employers get a better-skilled workforce, while colleges gain new students and revenue streams.
By taking an employer-first approach, creating customized, flexible programs, and marketing the benefits of corporate-backed tuition, colleges can unlock new growth opportunities and cement their role as essential workforce development partners.
Now is the time for colleges and universities to embrace the future of education through strategic corporate collaborations. Institutions that move quickly and smartly will not only remain competitive but lead the transformation of higher education itself.