As every employer knows, benefits can be difficult to manage and expensive. So, what could possibly be the advantage of adding more expenses to the budget — especially ones that go beyond traditional benefits like health insurance and paid time off?
Candidates have options in the current job market, allowing them to be picky about where they choose to work. And, with employees in the driver’s seat, we’re seeing a workforce that is increasingly focused on how companies ensure their employees are more than just numbers making them money — and treat them as such.
As American families currently carry more than $1.6 trillion in student loan debt, the question of providing student loan assistance is not an “if,” but a “when.” Here are five reasons you should already be offering student loan benefits.
#1: Employees are Actively Seeking this Benefit NOW
The amount of student loan debt is staggering — currently, more than $600 billion higher than credit card debt in the United States. Considering nearly everyone has a credit card and only some of us have student loan debt, it’s safe to say the path of higher education can have a negative financial impact for those relying on loans to make it happen.
Most often, employers think the only way to help employees with their student loan debt is through contributions, but that’s not the case. Contributions aren’t a prerequisite for student loan benefits. As roughly 250,000 borrowers default on their loans each quarter, employees are actively seeking help in managing their student loan payments. With delinquency and default of student loans on the rise, you can still set employees on the right track with a student loan repayment benefit, even if you can’t afford the price tag of contributions.
#2: You’ll Be the Employer of Choice for Top Talent
With a low unemployment rate, the battle for the best talent is fierce. Student loan repayment assistance is a huge advantage when employees have a choice in which company to work for. Nearly three years ago, 86% of workers said they would commit to a company for five years if the employer helped pay back their student loans. Yet, only 4% of companies currently offer this type of benefit — which means those who do have a huge edge over the competition.
Today, the most successful companies don’t just focus on seeking out incredible candidates, they’re looking for ways to make the most desirable candidates come to them. Student loan assistance is a very differentiated offering — but it won’t be that way for long.
#3: Employees Can Reach Life Milestones Because of You
You’ve seen the headlines, “Millennials are killing (insert industry here).” Today, the millennial generation makes up a significant amount of the working population — but, as they’ve continued to enter the workforce over the last decade, millennials have held off on making major life purchases. Why? Because some of the most prominent markets in our economy, like housing and higher education, have gotten drastically more expensive and salaries haven’t increased at a rate to match these rising costs.
However, if you think student loan debt is only an issue for younger generations, think again. All generations are making sacrifices because of student loan debt. In fact, 57% of Baby Boomers feel student loans are getting in the way of retirement.
Naturally, people with less debt have more money to spend in other areas. When companies help employees reduce their student loan debt, significant life milestones — like buying a house, starting a family, sending their children to college or saving for retirement — are more attainable.
#4: You’ll See Better Employee Retention
The smartest companies aren’t just looking to attract the best talent, they’re looking to keep it. Turnover has a negative impact on business — both financially and culturally. The average cost of each employee departure is one-third of that worker’s annual earnings and, in 2020, roughly 1 in 3 workers will voluntarily quit their job.
Voluntary benefits like student loan repayment might seem like they will cost your business but, even just for the sake of keeping exceptional employees, they’re a worthy expense. Aiding employees in tackling some of their debt makes a significant difference in whether or not they want to continue working for you. Your workers are human beings. When they’re cared for in such a way, employees are more inclined to stay with a company where they’re valued.
#5: Employees Will Sing Your Praise
What they say is true: happiness is contagious. Happy employees are both more productive and have a positive impact on company culture, which absolutely makes a difference for your business. But, when 52% of people are regularly stressed due to financial issues, it has a personal and professional impact on employees.
Financial stress is one of the biggest burdens a person can face — and not something your employees can simply “leave at the door.” By offering student loan assistance, you’re not only eliminating some of the stress affecting your employees, but you’re also opening more financial doors for them and creating a company culture they’ll want to shout about from the rooftops.
Will your company alone solve the country’s student loan debt crisis? No. But, ultimately, going beyond the standard of offering traditional benefits is a mark of your authenticity and genuine nature as an employer. An investment in student loan benefits demonstrates your investment in the financial wellness of your people.
Luckily, student loan repayment benefits are easy to implement and require very little maintenance once launched. And, because this voluntary benefit doesn’t have to align with open enrollment, you can set the new standard for how employees should be treated immediately.