The most important employee benefit you’re probably not offering
I have written in a couple of places early in 2016 about how I think the topic of Employee Benefits will be a very important one in 2016, perhaps more important to organizations in their quest to attract and retain talent than it has been in the last several years. And one of the ‘newer’ benefits that is emerging in at least some leading organizations is a relatively new one, but as things might turn out in the next few years, could be one that better enables adopting organizations to attract and retain workers in an increasingly competitive labor market.
Student Loan Repayment Assistance.
Here are a couple of data points to help you think about what is happening with student loans in the USA, and how these loans are impacting younger workers in particular.
First, the sheer amount of student loan debt in the USA is now a staggering $1.3 trillion. That is with a ‘T’. That is the kind of money that laughs at the Powerball jackpot. And this is not ‘just’ a new graduate or ‘millennial’ problem. The Associated Press reported late last year that “Generation X adults — those 35 to 50 — owe about as much as people fresh out of college do. Student-loan balances average $20,000 for Generation X.”
So lots and lots of folks, maybe the ones your organization is aggressively recruiting and hoping to retain, are carrying pretty significant Student Loan debts. So naturally when asked about whether or not these debt holders would value an organization that offers Student Loan repayment assistance, a recent survey showed that 80% would indeed like to work for an organization that offered such a benefit, (according to a recent survey by Iontuition and reported in BusinessWeek).
So in response to these colliding conditions – extremely high student loan debt loads, desire to attract the retain talented workers, and the desirability of student loan repayment assistance as a benefit, more leading organizations are adopting or at least experimenting with an employee student loan repayment assistance benefit. One example is PwC, who in a recent piece on Bloomberg shared their approach to student loan repayment benefits. PwC plans to contribute $100 monthly towards student loan payment reduction for eligible employees, a total benefit that can accrue to as much as $7,200 over time. Other companies are taking a slightly different approach towards the student loan repayment benefit, such as offering a lump-sum loan payment to employees when certain performance and retention targets are met. So an employee would receive a $5,000 loan repayment benefit upon completing five years of service.
While SHRM estimates that only about 3% of organizations currently offer student loan repayment as a benefit, it seems like the combination of factors above will drive the offering of this benefit higher in the next several years. It could be something to consider adding to your benefits offering mix if indeed you find that the talent you seek to attract and retain value this benefit above other, more traditional offerings.