Latest / The Diversity Career Podcast with Fexingo: Inclusion, Equity, and Underrepresented Professionals / How Loyalty Programs Can Be Career Equalizers
Transcript
- Lucas: You know that phrase 'loyalty is a two-way street' — in the workplace, it usually feels one-sided. But some companies are trying to change that with programs that look a bit like customer loyalty rewards, applied to your career. Luna: Like, earn points for staying, redeem for a promotion? Not exactly, I hope. Lucas: Not points, but real money: tuition assistance, student loan matching, micro-credentials that lead to raises. I want to talk about one specific example today. A large retailer — think Walmart or Target scale — started offering a tuition-free degree program to all its employees a few years ago. Luna: We hear a lot about those programs. Do they actually move the needle for underrepresented groups? Lucas: That's exactly the angle. I dug into the data from this retailer, and the headline number is this: employees who participated in the program were promoted at a rate two and a half times higher than non-participants within two years. And the gains were biggest for Black and Hispanic workers, and for women in store management roles. Luna: Two and a half times — that's not marginal. That's a career ladder. Lucas: Yeah. And the thing is, a lot of these workers had been stuck at the same level for years. The program didn't just teach them new skills — it signaled to management that they were invested. But there's a catch we should talk about. Luna: There's always a catch. Lucas: The program required a minimum of twenty hours a week to qualify. That excluded a big chunk of part-time workers, who are disproportionately women and people of color. So the same program that helped some actually widened the gap for others. Luna: And before we go deeper — quick honest thing. A handful of listeners chip in monthly through buy me a coffee dot com slash fexingo, and that's literally what funds making episodes like this one. Lucas: It's true. No ads, no sponsors — just a small community that keeps it going. If you've ever gotten a useful idea from this show, that's the place. Luna: Appreciate those who do. So back to the retailer — what else did the data show about who actually signed up? Lucas: Good question. Enrollment skewed toward younger workers, which makes sense — they're more likely to see a degree as a lever. But the company also noticed that take-up among Black employees was lower than expected, even though the program was free. Luna: Why? If it's free and leads to promotions, why wouldn't you? Lucas: They did focus groups and found two barriers. One: lack of awareness — many employees simply didn't know the program existed, or thought it was only for managers. Two: fear of time commitment. A lot of hourly workers worried they couldn't balance school with unpredictable shifts. Luna: So the solution wasn't just offering the benefit — it was communicating it differently and building flexibility into the schedule. Lucas: Exactly. The retailer started a mentoring program where past graduates talked to current employees about how they managed it. They also let workers schedule classes around their shifts. Enrollment among Black employees doubled in the next year. Luna: That's a concrete fix. And it shows that a good program alone isn't enough — you need the culture to support it. Lucas: Right. Now, let's zoom out. There's another type of loyalty benefit that's gaining traction: student loan matching. Instead of putting extra money into a 401, some employers match your student loan payments. Luna: I've seen that at a few tech companies. How does that work for career advancement? Lucas: Indirectly, it frees up cash flow so workers can afford to take on roles with longer-term growth potential — like a lower-paying management trainee job that leads to a better career path. One study from a large financial services firm found that employees who used student loan matching were 30% more likely to stay for three years. Luna: Retention matters, but does it translate to internal mobility? Or do people just stay in the same role longer? Lucas: Good point. The same study tracked promotions and found that participants were actually more likely to move up, because the financial breathing room let them take on stretch assignments without worrying about the pay cut. Luna: So it's a liquidity issue. People who are paycheck to paycheck can't afford a temporary step back, even if it means a bigger step forward later. Lucas: Exactly. And that's where these loyalty programs can be career equalizers — they address the hidden costs of career advancement that hit underrepresented workers hardest. But again, design matters. Luna: What's the biggest design mistake you've seen? Lucas: Making the benefit contingent on a performance review. Some companies say you have to have a 'meets expectations' rating to qualify for tuition reimbursement. That disproportionately penalizes people who are already marginalized — because bias in performance reviews is well documented. Luna: So the program ends up reinforcing the very gaps it's supposed to close. Lucas: Right. The best programs I've seen are automatic or have very low bars. The retailer I mentioned — no GPA requirement, no performance gate. Just show up and learn. Luna: Does the type of credential matter? Like, is a bachelor's degree better than a micro-credential or certificate? Lucas: It depends on the industry. In retail and hospitality, a certificate in supply chain management or digital marketing can lead directly to a promotion. In healthcare, you often need a full degree. The key is that the credential is tied to an actual job ladder within the company. Luna: So it's not about education for education's sake — it's about mapping the credential to a specific next role. Lucas: Exactly. Some companies now offer 'career pathway' programs where they say: if you earn this certificate, you qualify for this job, which pays this much more. That kind of transparency is powerful. Luna: I want to bring up a potential unintended consequence. If you make it easier for internal candidates to get promoted, what happens to external hiring? Do you end up with less diversity at the entry level because you're not bringing in new perspectives? Lucas: That's a smart concern. And some critics argue that internal mobility programs can reinforce a monoculture. But the data from the retailer shows the opposite — because their entry-level workforce is already diverse, promoting from within actually increased diversity at the manager level. Luna: So it's a pipeline issue. If your entry-level is diverse, internal mobility preserves that diversity as people move up. Lucas: Right. But it only works if the entry-level pipeline itself is diverse. So companies need both: diverse hiring at the bottom and clear ladders from the bottom up. Luna: Let's talk about another model — what about companies that offer 'skills-based' loyalty programs, where you get credits for completing training modules, and those credits can be redeemed for things like a certification or a conference? Lucas: I've seen that at a few professional services firms. Deloitte has a program where you earn 'learning hours' and can trade them for coaching sessions. The research shows it works best when the credits are tied to a specific career milestone — like earning a project management certification that unlocks a senior role. Luna: But again, the same equity questions apply. Who has time to complete those modules? If you're a single parent working two jobs, you might not. Lucas: Exactly. So some companies now offer 'learning time' as a separate paid benefit — like two hours a week on the clock to do training. That's a real equalizer, because it doesn't require unpaid overtime. Luna: That seems like a no-brainer, but I bet most employers resist because it's a direct cost. Lucas: It is a cost. But the return is measurable. The retailer I mentioned calculated that for every dollar they spent on tuition, they got back one dollar and twenty cents in reduced turnover and faster promotions. So it's not charity — it's an investment. Luna: I'd love to see more companies adopt that mindset. One thing we haven't touched on is the role of managers in encouraging participation. Lucas: Crucial. The biggest predictor of whether an employee signs up for a tuition program is whether their direct supervisor talks to them about it. In the retailer's data, stores where managers actively promoted the program had participation rates three times higher than stores where managers didn't. Luna: So it's not just a HR initiative — it's a frontline leadership responsibility. Lucas: Right. And that's where a lot of programs fail. They launch with a big email, but never train managers to have the conversation. The best performing stores in the retailer's program had managers who sat down with each employee and said, 'What do you want to learn? Here's how to start.' Luna: Personalized, not mass-produced. Lucas: Exactly. And that's the real takeaway: loyalty programs can be career equalizers, but only if they're designed with equity in mind — flexible, low-barrier, manager-supported, and tied to real jobs. Otherwise, they're just another benefit that looks good on paper but helps the people who already have advantages. Luna: And that two and a half times promotion rate — it's a proof point that when you get the design right, the results are tangible. Lucas: Absolutely. So here's a question for listeners: if your employer offers tuition assistance or a similar program, do you know the details? If not, maybe ask your manager this week. That conversation could be the first step up.