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Cash or Credits? Walmart, McDonald’s Explore New Kind of Employee Compensation

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Working while attaining a degree can be difficult – especially in the retail and foodservice sectors – but some companies aim to change that. New initiatives at large employers like McDonald’s, Walmart, and Amazon aim to make on-the-job experience count toward college credits, according to NPR.

The concept isn’t entirely new. High school AP classes and military experience have translated to college credits for years, many universities allow students to test out of course requirements, and corporate training from companies like Google and Microsoft already count toward credits. But in a first for the foodservice and retail industries, Walmart and McDonald’s are working with colleges to have their own workplace training earn credits for employees. Food handling and kitchen safety training can translate to insurance; table waiting and order-taking can advance a hospitality degree; management skills can be applied to business coursework.

Offering credits for on-the-job training and experience can attract more talent and, in turn, keep that talent on the job more. Some companies, like McDonald’s and Amazon, are seeing this as a talent attraction tactic while acknowledging that much of that talent will take their experience on to other employers. Others, like Walmart, see it as a talent pipeline from their stores to their corporate offices.

Lucas Botzen, HR expert and CEO at Rivermate, sees such initiatives as a boon to employers.

Despite the risk of training the future leaders of competitors, the immediate benefits reaped from having a well-educated and motivated workforce outweigh it. He sees it as a net positive for company culture.

“The employer is literally investing in the workers’ futures – a situation which creates a culture of growth and loyalty in an organization.”

“By investing in workforce education programs, employers can develop and grow talent from within their own organizations,” said Stephen Greet, CEO of BeamJobs.com. “When training costs are partially supported by the involved colleges, it presents a low-risk approach for employers to train their future leaders.”

The benefit to workers is mainly in reducing the time and cost of acquiring a higher education degree.

For one Walmart supervisor, Bonnie Boop, her Walmart Academy training ended up saving her the equivalent of two semesters of coursework – which, given her part-time student schedule, meant less late nights studying after work and a bachelor’s degree in 2.5 years.

“This can turn into a real game-changing opportunity for workers,” Botzen said, claiming it could be “the key to unraveling the barriers to higher education for many,” making it “much more accessible and relevant to their careers.”

But some are skeptical of such initiatives.

“While it seems advantageous to equate workplace training with college credits, this model might undermine the value of formal education,” said Michael Mastin, founder at Bowlake Chinese. “Workers could be disincentivized from pursuing further studies if practical experience is deemed equivalent.”

There’s also the concern that it may be another vector for employers to underpay their employees. “At the end of the day, it really would be best for employers to simply pay people what they are worth and stop using programs like food stamps and course credit as alternatives to that,” said Steven Rothberg, founder of College Recruiter.

“Employers have no issue increasing what they charge customers based on the laws of supply and demand, yet they resist acknowledging the existence of those same laws when it comes to increasing pay.”

To roll such strategies out at scale, more work would be needed. A codified system of measuring on-the-job training and performance would help in translating employment skills to transcripts, as would a sincere time commitment from academics to consider thousands of student workers on a case-by-case basis – no small task.

However these specific programs work out, the larger trend points to what many are calling a transition to a “skills-first approach” to higher education, where skills and certificates are weighted the same as credentials and degrees in education and employment. For employers, the benefits are clear: eligible talent pools are widened as more job-specific training is prioritized in higher education.

Efforts would need to be taken to ensure the system wasn’t being used to exploit workers or students, such as implementing “a strict cap on the number of credits that can be earned through such programs,” said Kyle Haynes, an associate professor at Purdue University.

“Universities would also have to ensure that employers are not offering training that has little or no broader educational value. Students would really suffer if universities implemented this kind of program without lots of preparation and careful oversight.”

Employment and higher education in America seem to be at pivotal points. As decision makers at the country’s largest companies and educational institutions weigh the costs and benefits of skills-first education, it’s worth asking:

What is the purpose of a job, what is the purpose of an education, and should they serve the same ends?

 


The Food Institute Podcast

In this episode of The Food Institute Podcast, IFDA President and CEO Mark S. Allen discussed the pressing challenges and innovative solutions in the foodservice distribution industry. Allen delved into topics such as labor shortages, transportation issues, technology advancements, and the importance of industry events like IFDA’s Solutions Conference.