Amazon announced Thursday it will pay college tuition for full-time and part-time employees beginning in January of 2022 after 90 days of employment. Amazon says the program will cost the company $1.2 billion by 2025.

The program will also cover high school diploma programs, GED’s, and English as a Second Language programs. Amazon had previously covered 95% of tuition, fees, and textbooks for only Associates degrees. Amazon will pay all tuition fees upfront and will not require employees to pay the company back.

“We’re spending a lot of money on signing and incentives, and while we have very good staffing levels, it’s not without a cost,” Amazon CFO Brian Olsavsky said in July. “It’s a very competitive labor market out there,” Olsavsky added.

The Bureau of Labor Statistics reported in July there were 879,000 unfilled jobs in the retail industry and 220,000 jobs in the warehouse and transportation industry.

The competitive job market is nudging companies like Amazon, Target, and Walmart to improve incentives to attract more workers. Amazon announced in May it had hired an additional 75,000 workers and would increase its employees' hourly pay to an average of $17, as well as a $1,000 signing bonus.

Walmart has said it will fully subsidize the tuition and books for 1.5 million part-time and full-time workers in the U.S. Its employees will be able to enroll in the program on the first day of employment. Target will also offer its 340,000 employees college tuition including books and course fees for a number of programs.

“Career progression is the new minimum wage,” said Ardine Williams, a vice president of workforce development at Amazon, told the Wall Street Journal. “Most adult learners don’t have the luxury of quitting their jobs and going to school full-time."

Chris O’Leary, a senior economist at the W.E. Upjohn Institute for Employment Research, says an education-based initiative and new incentives can help companies attract aspirational workers willing to do a difficult job until their education is completed.

Amazon also announced Thursday it plans to retrain 300,000 employees for higher-skilled, fast-growing jobs within the company over the next four years.

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