Guild Education partners with companies to help them offer tuition benefits to their employees to select institutions. Guild’s main goals are to provide working adults with quality education and help companies retain and satisfy their employees by offering education as a benefit.
Design & Operation
Company: Partners with Guild to enhance their tuition assistance program as a way to promote retention and satisfaction among employees, plus attract new workers. Guild offers the company guidance on tracking ROI, tax compliance, and turning on-the-job training into college credit.
Institution: As an academic provider partnered with Guild, the institution will be listed as an educational option to thousands of employees, boosting enrollment through a revenue-share model. The non-profit institutions listed offer online programming to ensure employees across the country have access.
Student: A student will be connected to the type of education and institution that fit their needs. They benefit from one-on-one coaching from admission through to career retention to ensure academic progress and program satisfaction. There are no up-front costs for the student, allowing low-wage workers to participate. See the clip below for an example of how Guild works for employees/students (in this case, Taco Bell).
Successes & Challenges
Guild has seen massive success in venture capital fundraising, raising $71.5 million to date over four rounds, including $40 million in Series C funding accomplished over the summer. This latest (and largest) fundraising effort wasn't sought out by Guild, but instead was offered by a group of interested investors. The current valuation of Guild Education is $125 million with investors such as Redpoint Ventures, Silicon Valley Bank, Cowboy Ventures, Salesforce Ventures, Rethink Impact, and Workday Ventures..
A challenge for some of the institutions, and perhaps Guild's opportunity for growth, is that many of the companies working with Guild will only offer support for programs that align with the work of the employee, such as supply-chain or business. Another challenge facing Guild Education is related to policy, as there is currently a $5,250 cap on educational benefits (a number that hasn't changed in two decades). Additionally, as more institutions sign on to partner with Guild, the enrollment potential for universities may not be as promising as the early adopters so Guild will need to continue to offer their educational partners incentives to participate.
"Employers give the money directly to employees in the form of a benefit...they then can choose to spend it at all of our different universities or learning providers, and then we have revenue shares with those partners to pay for the coaching and advising we provide." —Rachel Carlson (see clip below)
In the News
Wall Street Journal: Now Hiring, With Attractive New Perk: Free College Degree
Inside Higher Ed: Connecting Cashiers to College Degrees
“Most Walmart workers are not making a lot of money, so paying anything out of pocket, even for a relatively short period of time, can be difficult... Walmart seems to have realized that if you have happier employees, you’ll have lower turnover.”
“From its launch, the program...will offer employees personalized college advisors as well as discounts at 80 online universities offering everything from high school completion to data science certificates to master's degrees.”
Guild Education is "female founded, venture funded, and mission led" with the goal of increasing economic mobility for working adults (see Brittany's talk at Denver Startup Week discussing this mission). Founded in 2015, Guild Education started at Stanford University but then the founders chose to move operations to Denver for a better cost of living and family-friendly environment. Guild employs more than 200 workers, with a unique 50/50 male-female ratio of employees working in technology.
Founder & CEO
Rachel Carlson (MBA, Stanford) is the founder and current CEO of Guild Education. Rachel has clearly always had a passion for educational entrepreneurship given her track record in this space. While at Stanford, Rachel created Student Blueprint, an ed-tech company providing online education planning and advising services to college students. In 2017, Rachel was named one of the 30 Under 30 by Forbes (Education). Today, she is leading the charge in providing education as a benefit.
Co-Founder & Head of Student Experience
Brittany Stich (MBA, Stanford) is a first generation college student and former Teach for America participant. She identifies as an education entrepreneur and is dedicated to providing access to opportunity. Prior to her work at Guild, she was a program director at Quad Learning, Inc., an education service provider offering enrollment services geared toward community colleges.
Early companies to partner with Guild included Chipotle, Lowe's, and Lyft.— Lyft being the first "gig economy" company to offer education benefits to employees. More recently, Walmart and Disney signed on as partners and this has exploded the number of employees reached. With Walmart, 1.4 million part-time workers have access to education benefits for $1 per day. Through the Disney Aspire program, 80,000 hourly employees (known as "cast members") have access to education benefits through Guild; the company has invested $50 million in providing this benefit which includes paying 100% of the tuition up front.
Why do companies partner with Guild? "Employers only have time to invest in a handful of university relationships, but employees want a diverse set," said CEO Rachel Carlson in an interview with HR Dive. The perks of partnership also include assistance with navigating taxes, improving employee retention and satisfaction, and the upskill opportunities for current workers.
Getting in with Guild Education is almost guaranteed to improve enrollment. As part of the Guild catalog, there are 80 educational providers offering everything from bachelor's completion to master's degrees.
The intent of Guild Education is to reach lower-wage workers who may not have had access to tuition benefits in the past. Many seek to finish their bachelor's degree, while others want to go on to earn a master's degree. Guild Education connects these prospective students to the right program. As of June 2018, Chipotle reported 3,500 employees had already accessed their benefits since 2015.
Strong Return on Investment
Guild claims for every dollar spent on education as a benefit, their partner companies see a 208% return on investment.
Educational partners consistently see increased enrollments when partnered with Guild. For example, in just one term, the University of Denver witnessed a 10% increase in overall enrollment and 30% of all new students have come from the Guild partnership
(internal enrollment report).
The average retention rate for Guild students who are employees is 98% at partner companies, compared to 71% baseline retention rate. Chipotle found that 89% of employees who enrolled in Guild stayed on with the company for the following nine months.
“It’s been a life-changing experience for me. This is something I never thought I would achieve, finishing a degree I set out to receive so many years ago.”
—J’Amy Pacheco, Disney employee and University of Denver student (Wall Street Journal)
Guild Education has been able to tap into a growing fear among workers: the rise of automation. Providing more access to education for front-line and low-wage workers is a unique concept compared to the more traditional approach of funding education for those on the management track (Guild may have taken a cue from Arizona State University's partnership with Starbucks). By pursuing higher education, employees become more marketable by developing skills needed in the current and future workplace: critical thinking, creativity, and problem-solving. This successful enterprise demonstrates how solving bigger, more complex problems like the education gap and the elimination of front-line jobs can be as simple as facilitating the pursuit of education.
Guild Education has uncovered a win-win-win. Companies retain employees, universities boost enrollments, and students/employees upskill while staying employed. The organization has found a way to break down barriers between institutions and corporations, facilitating a much-needed bridge between academia and industry. The future of education demands collaboration and the promise of entrepreneurship lies in the convergence of different communities and groups.
Innovation also relies on serving the bottom line. As is the case with Guild Education, universities make money and companies ultimately save money through retention. For now, money still drives innovation in many ways. But more optimistically, finding opportunities to further educate the population is a worthy cause being led by Guild Education. With more major companies partnering with Guild and more employees taking advantage of their education benefits, the future looks bright for the enterprise and society overall.
Personally, this case study inspires me because I'm impressed by the female founders who started with a complex problem (social mobility) and devised a simple solution (facilitating education benefits). They took one piece of a larger issue and have transformed the way Fortune 100 companies think about retention and satisfaction among employees, all the while helping to close the education gap in this country. Wow!