Student Loan Repayment: The Ultimate Perk for Attracting Millennials?
Peanut Butter’s “Millennial Benefit Preferences” study found that millennials want student loan repayment way more than they want 401(k) contributions, health insurance, free food, gym memberships, or any of the other perks offered by most companies.
Just how strong is the pull of student loan repayment to millennial talent? Eighty-five percent of the millennials surveyed by Peanut Butter said that, if given the choice between two jobs, they’d choose the one that offered student loan repayment as a perk.
“The preferences millennials have for the compensation they want to be paid are different from [the preferences of] prior generations,” says Dave Aronson, Peanut Butter’s CEO and founder. “There’s the old adage that, ‘I want to go to work for a company that’s going to provide a steady stream of income and a pension, and I’ll retire there.’ Well, I don’t think retirement is planning is exactly what [millennials] are looking for.”
According to Aronson, the millennial desire for student loan repayment represents an opportunity for those organizations that are savvy enough to capitalize on it.
“I think that the prevalence of health plans and 401(k) contributions, and the fact that these college-educated millennials put way more weight on the perceived value of student loan repayment, says that employers may be missing something,” Aronson says. “There is a big opportunity to get their employees something they truly want.”
In other words: Everyone is offering retirement planning and health insurance. If you want to stand out from the crowd, you should offer student loan repayment plans.
But Is It Feasible?
Sounds great, right? Help millennials pay off their massive student debt burdens and they’ll come flocking to your organization.
But can employers really implement a perk like this, or is it just a pie-in-the-sky dream for millennials?
“I think it’s absolutely something employers can, should, and will do,” Aronson says. “Employers invest a lot of money in their employees, whether that’s in salaries, culture, or perks. Each year, they make decisions on how to allocate those dollars into their people costs. What our study shows is that those dollars would be of higher perceived value by the people they are trying to recruit and retain if they were paid in the form of student loan contributions.”
Cast in this light, student loan repayment programs seem eminently feasible. Take some of your company’s dollars out of salary increase and 401(k) contributions, put them in a student loan repayment program, and millennial talent will thank you.
In fact, some companies already offer student loan repayment – though it isn’t the most common of perks – and at least one company has set up a third-party platform that employers can use to pay off their employees’ student loans.
So the answer is: Yes, it’s feasible. Now hush, all you naysayers.
… But That Doesn’t Mean You Should Stop Offering Other Perks
Aronson doesn’t want anyone getting the wrong idea: Millennials want student loan repayment, sure, but they’re still interested in health insurance and other perks. Your company shouldn’t just ditch all the other benefits and count on student loan repayment to bring in all the bright college graduates. No, you need a good mixture, and the lineup of perks your organization offers will depend, in part, on the industry in which it operates.
“An employer in the fitness or wellness industry could offer something related to their strategy and culture, like a gym membership, but especially in fields like technology, or finance, or the professional services – where most roles necessitate college education – employers would probably see better engagement from their employees by offering [student loan repayments],” Aronson says.
The Big-Picture Point: If You Want to Attract and Retain Great Employees, Listen to What Talent Tells You
It’s easy to get bogged down in the specifics here, but Aronson notes that, as much as he’d “like to say that all companies should offer student loan repayment,” that isn’t the real takeaway here.
“I think the real message is that, if we want to attract and retain talent, we have to listen to those employees,” Aronson says. “Millennials [represent a significant portion] of the workforce, so we have to pay really close attention to what they want.”
The benefits and perks used to attract previous generations may no longer work when it comes to millennials. So, rather than relying on tradition, why not go off in a new direction? Offer millennials student loan repayment – or something else they really want. Don’t assume that the same employee value propositions that wowed the boomers and Gen. X will wow the millennials.