How Macy’s hopes to drive employee retention with upskilling effort

In an effort to help retain and retrain employees amid the Great Resignation, American retail legend Macy’s Inc. is offering a debt-free education benefit for its more than 100,000 employees starting in February.

The retailer is partnering with education and upskilling platform Guild Education to create a four-year program that includes courses for high school completion, college prep, English language learning, associate and bachelor’s degrees, boot camps and professional certificates, all within Macy’s debt-free network on the platform. The $35 million program is open to Macy’s regular, salaried and hourly employees who work in the U.S. and will cover 100% of tuition, books and fees.

Retailers have been hit especially hard in the Great Resignation, prompting many to seek innovative ways to hire and retain workers. Fortune reports that more than 720,000 retail employees gave notice in August alone. As part of its efforts, Macy’s also announced this month that it is raising its minimum rate to $15/hour across all store locations. It has already phased in the new rate in several markets and will offer it nationally by May. This past summer, Macy’s also completed pay increases to $15/hour for its distribution center employees.

Related: HR tech Number: Barriers to upskilling

The company’s new education benefit aims to remove a “major” barrier to continuing education and to help its employees grow their careers and earning potential, according to Danielle Kirgan, chief transformation and human resources officer at Macy’s.

“From the moment they express interest through the completion of the program, colleagues have access to a dedicated coach to help navigate the way,” Kirgan says. “This was important to us because we know the process of enrolling and completing a program while working can present challenges.”

Danielle Kirgan of Macy's
Danielle Kirgan of Macy’s
Macy’s first considered providing an education benefit in 2019 but sidelined it due to the COVID-19 pandemic. Kirgan says the retailer’s interest in working with Guild stemmed from its diversity, equity and inclusion efforts as well as its performance-driven culture. Kirgan calls the program “the natural addition to the internal learning opportunities we provide.”

Guild’s online learning platform connects learners to its learning marketplace where they can take classes from universities and learning providers.

Taking aim at employee retention

Guild, which also counts Lowe’s, Disney, Taco Bell and Five Guys as clients, sees evidence that its services help with employee retention. This summer, Target signed up to offer debt-free education to its frontline workers using the platform and Walmart expanded its education program to remove the $1 a day fee for associates, making all education programs fully paid for by the retailer. And Chipotle employees who participated in the restaurant chain’s Guild Education program, for example, were 7.5 times more likely to move into a management role. Guild also found that one client’s Black employees were 2.1 times more likely to be promoted when participating in Guild programs.

“The big key here is unlocking economic opportunity when employees stay at a company and see that their effort with the Guild program has unlocked a promotion. You’re really trying to tackle your diversity, equity and inclusion objectives through something like reskilling and uplearning,” says Lorna Hagen, Guild’s chief people officer.

“We were impressed with the quality of the Guild offering [that is] geared specifically to working adults, as well as its academic partnerships and track record. We were also attracted to the coaching support that Guild offers our colleagues,” says Kirgan.

In a job market that has seen workers leaving in alarming numbers, employers are scrambling to keep their employees engaged in their careers, says Rebecca Wettemann, CEO and principal at Valoir, a technology industry analyst firm focused on the connection between people and workplace technology. “As companies seek to better engage employees, helping them see a path for career advancement in the company–even from entry-level positions–is a key factor in engagement,” she says. “Providing them with access to education can be an important differentiator in both recruiting and retention.”

Upskilling also is a key factor for helping employees maintain their viability in the workplace, says Hagen.

Lorna Hagen of Guild
Lorna Hagen of Guild

“One of the things that we love to say at Guild is about the shelf life of a skill. It’s very short,” says Hagen. “This idea of four years of college and 40 years of a career [no longer applies]. The shelf life of a skillset is less than four years.”

Macy’s clearly thought so. “We heard from our colleagues through various surveys that continuing education is important to them. We recognized that a partnership with an organization like Guild would allow colleague growth, fuel our talent pipeline and help achieve equity,” says Kirgan.

She adds, “From a  recruitment perspective, the education offering is a part of the consideration set for our prospective colleagues and critical for us to remain competitive.”

Phil Albinus
Phil Albinus is HR Tech Editor for HRE. He has been covering personal and business technology for 25 years and has served as editor and executive editor for a number of financial services, trading technology and employee benefits titles. He is a graduate of SUNY New Paltz and lives in the Hudson Valley with his audiologist wife and three adult children. He can be reached at palbinus@lrp.com and followed on Twitter @philalbinus.

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