In many industries, gone are the days when a “traditional” benefit package alone will attract and retain highly talented recruits. Employees today are in one of the most highly competitive job markets in decades and have choice and leverage when it comes to making the final decision on a job offer. An organization’s benefit package can weigh heavily in the decision making process for a potential employee.
Add in demographic shifts such as the emergence of the millennial generation and you find employers really being pushed to shake things up and get creative in their benefit offerings. One notable recent development - student loan assistance - continues to grow in popularity.
As the generation with perhaps the most amount of student loan debt, standard, long-view added benefits such as saving for retirement in a traditional 401k are of less note and interest than the ever present student loan balances.
According to StudentDebtRelief.us, there are 45 million student loan borrowers with more than $1.52 Trillion dollars in student loan debt, making the average monthly payment $351.
The staggering amount of student debt has many looking for solutions, including ones that could involve employers. As of February 2019, proposals have been advanced in both the US House and Senate that would permit employers to contribute up to $5,250, tax-free, to their employees’ student loans.
When planning how a student loan assistance program would work in your organization, consider:
Conducting an employee survey before a rollout may help your organization better understand specific needs.
Providing general financial wellness resources should also be on the table. Helping employees manage their overall debt is smart business as studies show employees who have less financial burden are more engaged and productive. Also, be sure your approach doesn’t make employees choose between paying off student debt and saving for retirement. Resources can be provided for both.
Finally, remember that an educated workforce, regardless of the benefit, will help ensure engaged employees are effectively and efficiently using their benefits, which means lower long term cost to the employer. So - educate, communicate, and repeat.
Employees are relying more than ever on their employers to be the resource center for many of their non-workplace related needs and the student loan assistance benefit is just one of the newest ways we are seeing the market change to cater to these needs.
In the ever-changing environment of employee benefits, it is important as an employer to stay current with the wants and needs of your employees, and to also work with your employee benefit consultant to develop creative solutions that work for your organization.