PSO Pearson Plc

By Vanessa Fuhrmans 

Tuition aid is one of the most common -- and yet most underused -- benefits employers offer their workers. The hotel industry has good reason for wanting to change that.

In one of the tightest labor markets in decades, the already high rate of annual turnover in hospitality jobs -- which includes lodging and restaurants -- has crept to above 70% in recent years, according to Bureau of Labor Statistics. At the same time, a boom in hotel development has the industry scrambling to attract even more workers, and industry executives say a growing number of graduates from hotel-administration programs are going into other fields besides hotel operations, such as development and consulting.

With that economic backdrop, the American Hotel & Lodging Association and education company Pearson PLC are pairing up to launch a pilot program that will foot the bill for hotel-industry workers to get two-year, online associate's degrees and cover much of the cost of bachelor degrees. The idea is to attract and keep employees longer, while cultivating a new crop of managers from within hotel companies' ranks.

Companies such as Starbucks Corp., McDonald's Corp. and Walmart Inc. have expanded tuition-assistance programs in recent years to foster employee loyalty and help frontline workers overcome the rising cost of higher education. But the hotel initiative is one of the most ambitious efforts to date: Ten companies with a collective 50,000 employees -- including Red Roof Inns, Wyndham Hotels and Resorts and New Castle Hotels & Resorts -- are participating in the two-year pilot.

Pearson Executive Vice President Jim Homer said the program won't cost participating companies more than what they already offer in tuition benefits -- in most cases between $1,000 and $5,250 a year per employee. He said the company is able to keep costs down, in part, by supplying its own course materials and helping employees speed up the time it takes them to earn a degree.

Though the companies estimate 500 workers will participate in the initial stage, the program is available to the companies' broader workforces, and the goal is to have more hotel companies sign on after the first two years. Employees can use the benefit to pursue a degree in hospitality, business or other program that would help them advance into the management ranks.

"Our industry has really lacked bench strength over the last decade, and we know we need bench strength," said Gerry Chase, chief operating officer of New Castle, who said he began his own career as a bellman while attending college classes. "This helps us give more people that opportunity I had."

Though a majority of U.S. employers, including the 10 participating hotels, offer some sort of tuition assistance, employees rarely use them. According to the International Foundation of Employee Benefit Plans, participation rates are typically under 5%.

Pearson says it aims to change that by eliminating out-of-pocket expenses for hotel employees pursuing associates degrees, helping them with the application process and rolling over any existing credits. Employee-students can currently pick from at least four online associate-degree programs, then get help in transferring to bachelor programs and applying for further aid, such as Pell grants.

(END) Dow Jones Newswires

February 28, 2018 19:48 ET (00:48 GMT)

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