The employment paradigm is changing. The old notion that an employee is just a cog in the company machine is no longer accepted at face value. Now, the best employees are looking for organizations with people-first orientations, organizations that emphasize the value they can provide their employees.
While it’s not a crazy concept that employees want to be seen as humans, it does mean some organizations have to change how they approach benefits and perks. But this also presents an important opportunity for companies to differentiate themselves.
Today’s workforce, primarily made up of millennials, is dealing with a student loan debt crisis. With the student loan debt surpassing $1.5 trillion among nearly 45 million people, the life of the modern worker is largely defined by their student loans.
As an employer, you have the ability to offer benefits that can ease the student loan burden. As more and more companies are extending their benefits packages to include holistic financial wellness programs, it’s no longer a question of whether you should offer student loan benefits, but a question of how quickly can you get a program started.
You have the power to significantly improve the personal lives of your employees — and give your company culture and employer brand a boost — by providing student loan repayment assistance. Here are just a few of the benefits you stand to gain:
1. You’ll Be Seen as a Leading Employer
US student loan debt has reached an all-time high, $600 billion greater than our national credit card debt. If you take steps to help employees alleviate their debt, you become a leading employer setting a positive example for other companies to follow. At the same time, you’ll catch the attention of talented workers looking for companies that take care of their people.
An employer contribution to employee student loan debt is perhaps the most well-known student loan benefit, but there are other options as well. For example, if you can’t afford the price tag of making contributions directly, you could offer a voluntary student loan repayment benefit instead.
2. You’re Helping Employees of All Generations Achieve Milestones
Millennial and Gen. Z workers are less likely than previous generations to make major life purchases, such as homes and cars. That partly has to do with the financial burdens they’re already shouldering — like student loan debt. Put simply, these monumental purchases come at too high a cost for young workers to pay on entry-level salaries when they also have all this debt to contend with.
For more expert HR insights, check out the latest issue of Recruiter.com Magazine:
And contrary to what you might believe, millennials and Gen. Z-ers aren’t the only generations struggling with student loans. All generations are making sacrifices because of this debt. In fact, student loans are even getting in the way of retirement for many baby boomers.
Debt relief will equip employees of all generations with greater purchasing power. Milestones like marriage, buying a house, sending a child or grandchild to college, or even saving for retirement will finally be within your employees’ reach.
3. You’ll Attract Top Talent
The low unemployment rate has created a hyper-competitive marketplace in which the battle to win talent has only intensified. Student loan benefits are a key factor in developing the competitive edge your company needs to stand out.
Only 4 percent of companies currently offer student loan assistance, but nearly 90 percent of recent graduates consider this benefit when assessing potential job opportunities. The employers actually doing something to help employees solve this very real problem will be the ones to attract the next generation of top talent. Student loan benefits are currently a differentiating offering, but it won’t be that way for long.
4. You’ll Increase Retention
Getting incredible people to join your team is only half the battle. The most successful companies also focus on keeping those top-notch employees around.
Approximately 41 million people voluntarily quit their jobs in 2018, and that number is expected to grow to one-third of all US workers by 2020. Employers can take control of this situation by offering student loan repayment assistance.
This additional benefit may seem like an unjustifiable cost on first glance, but consider the power it can have in keeping exceptional employees on board. When you help employees tackle their student loan debt, they’ll feel authentically cared for by your company. This, in turn, fosters a stronger sense of loyalty and motivates employees to keep working for you instead of a competitor.
5. You’ll Improve Your Company Culture
Happiness is contagious. A happy team builds a productive and positive company culture that promotes camaraderie and collaboration.
Student debt, however, is a major barrier to building such an optimistic community. More than 85 percent of people report that student loans are a significant source of stress, and one-third of people say student loan debt is the biggest stressor in their lives.
Your employees don’t leave this stress at the door when they come to work every day. It affects their moods, their relationships with coworkers, and even their performance on the job. However, if you eliminate some of this stress through repayment assistance, it has less of an impact on their personal and professional lives.
Offering student loan assistance speaks volumes about your nature as an employer. By approaching your employees as humans first, you set a standard for how they should be treated, both in and outside of the workplace.
And, because student loan repayment benefits don’t have to align with open enrollment, you can set this new standard immediately.
Shann Grewal is vice president of IonTuition.