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Good morning! It's Tuesday, February 20th. Today, we’re featuring Guild, a $4.4B company helping employers provide education benefits programs to their workers!

THE FEATURE

Guild— Solving Employee Retention via Education and Generating $300M

Last year, Gallup reported that a stunning 51% of employed workers are watching for or actively seeking a new job. 

This is a massive problem for businesses. When a worker quits, a company loses someone with crucial institutional knowledge and is forced to hire and train new ones. As a result, losing a qualified employee costs an average of 1-2 times the employee’s salary. 

Guild provides an education solution for businesses looking to retain employees, and it reached an estimated $300M in revenue last year!

So, What's the Business?

A McKinsey study from 2022 found that 63% of people who left their jobs cited a lack of advancement opportunities. Businesses often struggle to promote veteran employees because they lack specific certifications or degrees. 

Guild was founded in 2015 as a solution for businesses looking to upskill and reskill their employee base. At its core, it is an education-as-a-benefit company.

Guild operates as the middleman between employers and educational institutions, helping match employees to the optimal learning programs. When an employer begins using Guild, they go through a design and strategy phase that results in a tailored employee portal that tracks their progress, whether that’s towards a GED, undergraduate degree, or even master’s program. 

The company’s business model revolves around its partnerships with educational institutions like the University of California and Purdue University. Academia is great at teaching but not at marketing. So, in return for Guild bringing high volumes of new students to educators, they receive 3-35% of the tuition fees paid by employers. 

In simple terms, Guild generates its $300M in annual revenue from charging education institutes a commission for funneling new students into its programs. 

If you want to see Guild’s model in action, look no further than retail giant Target’s “Dream to Be” benefits program. Through Guild, Target employees can select from 250+ undergraduate, master’s, and high school programs. Target pays 100% of the cost of high school and select undergrad and certificate programs and $10K a year for master’s programs. 

How They Win: Making Each Stakeholder Happy

The core of Guild’s success comes from providing solid value propositions to each stakeholder in its business model. 

Customer

Companies like Walmart, Chipotle, Disney, and Target use Guild to upskill and reskill thousands of low-wage workers into higher positions. 

It isn’t pure altruism that drives these companies to invest in employee education; it makes financial sense. Employees participating in Guild programs are 30% less likely to leave their jobs. Plus, employers using Guild report that 24% of their applicants refer to their education benefits program as a reason for applying. 

Therefore, these employers save money via employee retention and easier recruiting. 

Workers

Guild reported in 2022 that 90% of its employee learners incurred no costs in the form of tuition, textbooks, or fees. 

According to the US Bureau of Labor Statistics, workers with a bachelor’s degree make 68% more than those with just a high school diploma. So, Guild offers massive opportunities to workers, especially since they aren’t the ones paying for their education.

Education Partners

Colleges have always struggled to bring in working adults— to do so would require extensive, high-cost digital ad campaigns. 

For Guild’s learning partners, they don’t have to worry about marketing. Guild operates as its customer acquisition machine, bringing in new students and taking a cut of the tuition fees. 

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