Tuition Assistance Makes the Grade at Chipotle

By Kathy Gurchiek Sep 5, 2017
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Carlos Grajeda struggled twice to finish college.

The first time he enrolled, he was a new high school graduate, the first in his family to attend college. But, scared and intimidated, he dropped out after his first year. The second time he was in his mid-30s, married, with two daughters ages 8 and 6. He attended college part time while working part time. He quit after a year.

"I just could not continue raising my family and going to school at the same time. It was too overwhelming," he told SHRM Online.

That changed in 2014 when he began working at Chipotle Mexican Grill in Denver and began attending college courses subsidized by Chipotle.

In 2018, at age 53, Grajeda will graduate from Colorado State University-Global Campus with a bachelor's degree in science and communication.

His employer's benefits were the catalyst for returning to school, he said, starting with a 16-week Guild management certificate program that is the equivalent of a semester of full-time coursework. It helped him transition to a college degree program.

Tuition assistance, discounted tuition rates and college credit for on-the-job training provide employees such as Grajeda an affordable way to earn a college degree. Such offerings are also a retention tool and a way to groom workers for career progression at a company.

Chipotle has a long-standing education benefits program. Since expanding its offerings in 2015 to hourly workers, it has provided education benefits to nearly 3,500 employees. In July 2016, Chipotle partnered with Guild Education—a Denver-based online platform with a network of nonprofit, accredited colleges and universities—to administer education benefits that include credit-for-training opportunities.

Guild Education works with employers to identify their internal training needs and align them with schools' offerings. The result is improved retention and higher promotion rates among participants, according to the organization. It found:

*Participants are twice as likely as nonparticipants to be promoted at Chipotle.

*Since November 2016, five months after partnering with Guild, Chipotle has had an 89 percent retention rate among employees who enrolled in the education program. That is nearly twice the retention rate compared to those who did not enroll. 

[SHRM members-only policy: Education/Tuition Assistance]

"A year into the program [with Guild], we are hearing tremendous feedback from our employees and seeing strong results in terms of enrollment, retention and internal promotions among employees who are participating in the program," said Steve Ells, Chipotle's founder, chairman and CEO, in a news release.

Chipotle is bucking a trend of fewer employers offering education assistance. The number of employers that provide undergraduate degree benefits has dropped from 61 percent in 2013 to 53 percent in 2017, according to SHRM's 2017 Employee Benefits survey.

Kathleen Coulombe, senior advisor for government relations at the Society for Human Resource Management (SHRM), doesn't think the decrease in employer participation is an indication of the benefit's popularity or value.   

"Employers are always looking for new and different benefits that best fit their workforce. That is why we've seen this emergence of student loan repayment," which could be expanded under the Employer Participation in Student Loan Assistance Act (H.R. 795) that SHRM supports. "Employees many times dictate benefit offerings based upon their needs and desires," she said.

In fact, a bipartisan bill is expected to be introduced in the U.S. House and Senate in September that would double the amount of tax-free money employers may offer for education assistance from $5,250 to $11,500 per calendar year. The current amount has not been increased in nearly 40 years.

"Employers are always looking for the right mix of benefits that assist them in attracting and retaining top talent," Coulombe said.

SHRM is advising Congressional members on the legislative language and has coordinated efforts to advocate for the legislation, she said. SHRM co-chairs the Coalition to Preserve Employer Provided Education Assistance, which aims to protect and expand Section 127 of the Internal Revenue Code.

"Providing tax-free educational assistance is an important tool for furthering higher education, allowing employers to attract the best employees and building an educated workforce to continue to position the U.S. to compete globally," she said

Tuition Assistance, Discounts   

Chipotle offers tuition assistance of up to $5,250 annually. It does not use a reimbursement model because requiring an employee to pay tuition upfront is a financial hurdle many are not able to leap, especially those in lower-level jobs, according to Rachel Carlson, CEO and co-founder of Guild Education. Instead, the employer pays the school.

Employees who attend class at a college in Guild's network pay a discounted tuition rate of 5 percent to 25 percent, depending on the school. With the discount, annual tuition averages between $7,000 and $8,000. Employees may attend a school not in the network, but they would not receive a discount.

Most employees take one or two live-streamed, interactive courses over an eight-week period, Carlson said, because a traditional semester of five classes "really is not a feasible schedule for a working adult."

Tuition assistance may be used in other ways, such as for a management training course, English-as-a-second-language classes and a GED preparation program. Some, like Grajeda, find that a certificate program "is a great path back to college, delivering meaningful skills, college credits … [It is] more manageable than jumping right back into a full-time college course load," Carlson observed.

Another benefit is access to personal counselors. Grajeda, for example, speaks weekly with a coach.

"All employees work with an enrollment coach first to find the right program and enroll, and then once enrolled, all students work with a Guild success coach on a weekly basis, focused on succeeding in both school and work," Carlson said. 

Internal Training Converts to College Credit 

Chipotle is among employers such as Pizza Hut, Fiat/Chrysler and Jetblue that help employees accumulate college credits while on the job and apply those credits to an undergraduate or graduate degree program at a participating college or university.  

At the pizza chain, for example, employees may apply credits earned from a certain number of training courses toward degrees at Excelsior College, an accredited institution based in Albany, N.Y., that offers online courses.

Chipotle employees can receive up to $15,400 worth of college credit for training on such skills as learning to manage a supply chain and handling profit-and-loss statements. An employee who becomes a general manager will have earned up to 44 credits—more than one-third of the college credits required for a degree.

Earning college credit is not limited to managers. Crew members, for example, receive nine credit hours for training.

"At Chipotle, someone who is making your burrito or ringing you up at the cash register may receive a small number of [college] credits after six months on the job … if they've completed training," Carlson explained. "Every employee at Chipotle has earned some amount of college credit; whether [they] use it for a degree it's completely up to them."

Grajeda racked up 35 credits in three years for training he received as a crew member, kitchen manager and service manager. He was able to add those credits to college credits he'd earned years earlier.

He said returning to school has been life-changing.

"It seems that everything I learn has a way of working itself not only into my work life at Chipotle but also into my personal life," he said in a Chipotle blog post. "I feel as though I am a completely different manager than when I first started [school]."  

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