NEW YORK (TheStreet) -- When Starbucks announced its "College Achievement Plan" in collaboration with Arizona State University this month, it seemed the coffee giant was set to have a monopoly on ambitious employees. For juniors and seniors in college, the program offers full tuition reimbursement, and for freshmen and sophomores, a partial scholarship.
Even though it sounds generous, the program has its detractors who say Starbucks has simply found a clever way to reduce employee turnover -- if you quit your job while you're in school, you lose all benefits. No matter the motivation, free college tuition will be a significant incentive for many workers, and some experts say it's just a matter of time before other companies try to compete. How far they'll go, however, remains to be seen.
"In business there will always be those who follow, those who lead, and those who stay on the couch," says Adam Levin, founder of Credit.com. "It's in the self-interest of every business that can afford it to do something like this. The more young people are able to get out from under student loans and participate in the economy, the greater the benefit to every business in the economy."
Many companies that follow in Starbucks' footsteps will do so quickly -- possibly within the next six months, predicts Barbara Greenberg, clinical psychologist. Greenberg says that so many companies may develop similar programs, 2014 will be remembered as the year businesses started taking responsibility for workers' education."Everyone wants to be part of something exciting, even if it costs them money," she says. "This is how trends are born. One company generates the buzz and appeal and then others follow suit. We're going to see other companies jumping on this bandwagon in an impulsive way." Starbucks' move is probably already spurring some of its competitors to action, says Bryan Carey, co-founder of Money Saving Parent. "You can bet that management at competing businesses in food service and related industries have already met, talked about the plan and are presently brainstorming ways to respond," Carey says. "Something as generous as a free degree cannot be ignored, and it won't be taken lightly. I could easily see the day when extra employee perks like free online tuition and other benefits become an industry norm." While some companies will do exactly what Starbucks did and partner with an online university and develop a tuition plan, others will decide to offer something they hope will be perceived as better than free tuition, such as free health insurance or a more generous 401(k) savings plan, Carey suggests. In the short term, however, it's tuition reimbursement programs we're going to see more of, says Doug Schade, principal with recruitment firm WinterWyman's software technology search division. Also see: How to Find Your Passion in a Job You Hate
"In this employment environment with lots of people looking for jobs, employers just offering 'good' jobs are doing fine in their recruitment efforts," he says, implying that as long as companies still have interested applicants, they've got no incentive to roll out a more impressive benefits package. With that said, Starbucks isn't the first company to offer tuition assistance, and although they may be doing it "on a grander scale," other companies are making a concerted effort to pay for employees' education and help them pay down student loans, Levin says. Also see: How to Ask Your Employer to Give Back
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