Employers who want great employees are having to work harder and harder to find them, and to get them to stay.
This has many innovative organizations and Human Resources departments re-thinking their employee benefits strategies as a way to attract and retain talent, which is good. But there can often be a disconnect when it comes to perceptions about what employees really want. And too many employers are missing the elephant in the room.
Crushing Student Debt
The elephant metaphor works all too well here. Student debt is a huge issue that weighs heavy on your employees. And yet few employers are recognizing the extent of the problem.
Many people associate student debt with a particular subset of the workforce, namely fresh college graduates and junior employees. But a riveting study by CommonBond tosses those ideas out the window.
The reality is that student debt affects a huge portion of your employee base. Of 1,500 workers surveyed:
- 72% reported currently having student loans or having had student loans in the past
- 59% of employees aged 22 – 44 currently have student debt
- 21% of employees over the age of 45 currently have student debt
But that’s not the end of the story.
- 21% of respondents said they plan to take on debt in the next five years to finance someone else’s education.
- And 10% of respondents said they are carrying their own student debt, plus that of a friend or family member.
With the total U.S. student loan debt sitting at 1.4 trillion dollars, there are far reaching consequences, both for your employees and your business.
Debt rolls downhill
Employees starting their careers with massive amounts of debt are less willing and able to “put in their time,” “work their way up,” or “take one for the team.” It’s not that they don’t see the value in some of these things. They simply can’t afford to do them. The days of “paying your dues” are over. For today’s workers, it’s all about paying your loans.
If you’re wondering why job hopping seems to be the new normal, it’s all related. Research shows that the best way for an employee to get a significant pay raise is to get a new job. In this kind of employment environment, those with sizable loan debt won’t think twice about accepting a more lucrative offer somewhere else.
Debt-ridden workers in all stages of their careers are delaying important life decisions because of student loans. For many employees, things like getting married, having children, buying a house, and retiring are concepts that seem far out of reach.
In the meantime, their debt is seriously stressing them out. Between 46 and 53 percent of workers with student debt reported worrying about their personal finances “most of the time” or, worse yet, “always.” If you think this isn’t affecting workplace productivity, you’re still not seeing the elephant.
Here’s the deal
Your employees took out loans to improve their skills and make them more valuable to employers. Now that they’re employed, they want financial stability. But their student loans are getting in the way. And they need help.
And it’s not just recent graduates who feel this way. The CommonBond study showed that the vast majority of employees want to see their employer offer student loan benefits.
Here are the percentages of employees who have (or plan to take on) student debt that want their company to offer student loan tools and resources, broken down by age:
22 – 34 81%
35 – 44 77%
45 – 54 75%
55 + 65%
But it doesn’t end there.
Across every single age category, these numbers jump significantly when those employees were asked if they would be more inclined to stay at their company if they were receiving student loan repayment benefits:
22 – 34 87%
35 – 44 88%
45 – 54 83%
55 + 78%
If you’ve been searching for that magic employee attraction and retention tool, look no further. It’s right in front of you.
But you’re not offering it
SHRM research has revealed that only about 4% of employers are offering some kind of student loan repayment benefits. With demand being what it is, this seems downright silly. Especially in a tightening labor market.
One reason that helps explain why student loan benefits aren’t more common is that employers haven’t quite caught on to the fact that this is a top concern for their employees. Perceptions of company leadership and HR are often quite different from those who are actually working within the organization, on everything from what motivates them to what attracts them and makes them want to stick around.
If you want to attract and retain the best employees, you need to start thinking like them.
- What kinds of things are they looking for in an employer?
- What values do they care about?
- What issues are they struggling with?
- What’s holding them back from being the best employees they can be?
- How can you help?
Still not sold? Here’s one more statistic for you:
The American Student Assistance survey found that with all else being equal, if a prospective employer offered a student loan repayment benefit, 80% of respondents said it would have a considerable impact or be the deciding factor in the decision to accept the job. Talk about a hiring advantage!
If you haven’t thought about finding ways to help your employees with student loans, now is the time. The sooner you get on board, the more you can differentiate yourself as an employer of choice. And start helping your employees become, more productive, more financially stable, and more likely to stick around.
Photo by Elnur Amikishiyev