How Employer Student Loan Repayment Assistance Programs Can Help Your Business (Part 3 of 3)
We’ve reached the end of the road with our blog series on the three basic ways that an employer student loan repayment assistance program can help your business. (EVP) and boosting your branding within the market. In our last article, we discussed how this type of benefits program can supplement your current recruitment strategies by adding to your employer value proposition. The focus was on prospective candidates. Now we turn our attention to how this type of benefits program can affect your current employees.
Lower Your Employee Turnover Rate
The Job Hopping Phenomenon
Ask any recruiter and they will tell you that long gone are the days where an employee worked for the same company for 30-plus years before retirement. Employer loyalty is a thing of the past. People just don’t stick around at the same job anymore. They hop around like a bunny in springtime.
It has even gotten to the point where some industries just take high turnover as inevitable – as certain as the sun rising and setting each day. Take sales for instance. As an industry, sales has a minimum annual turnover rate of 34%. How many times have we heard sales managers write off employee turnover within the company as just par for the industry?
The average American will hold 10 to 15 jobs in his or her lifetime. Millennials certainly aren’t afraid to job hop. They do it like nobody’s business. We can speculate as to the reasons why this may be, and it really varies on a case by case basis. Some people just aren’t cut out for the job. Others get burned out with time. There are many reasons why employee turnover persists in being a problem, and therefore, there are many opportunities for companies to make improvements in their retention strategies.
The Cost of Job Hopping to the Employer
There is one thing, however, that we can say for certain: employee turnover can be expensive for the employer.
If you are in the HR and recruiting game, you know exactly how costly it can be to bring on a new hire. The average cost-per-hire in this country is $4,129. It takes about 42 days to fill an opening when someone leaves, and that doesn’t even include the amount of money it takes to advertise the job opening or to hire a headhunter to source your candidates.
To top it all off, loan borrowers are even more likely than the average worker to switch jobs during the first 10 years of their career, according to a study from the University of Iowa. That’s kind of a big deal. Employers should be doing everything they can to stay competitive with their branding to attract top talent and to decrease their turnover rates.
Enter the employer student loan repayment assistance benefit to save the day!
Getting Them To Stick Around
With young professionals worrying so much about their student loan debts, it’s only logical that they would cling to any help that they can get. Consider such a benefits program as part of your employer value proposition (EVP), those offerings that make people want to work for your company instead of for your competitors.
We have already established in the previous blog posts that debt is the number one stressor for millennials. It affects their ability to make important life decisions, like buying a car or home, getting married, or having children. It also keeps them from saving for retirement.
A student loan repayment assistance program benefits solution would address these issues head-on and speak directly to the job seeker. Consider for a moment just how important benefits are to a job seeker. Nearly 57% of all job seekers consider benefits a top consideration when choosing a job.
So let’s put all these pieces of data together: millennials are the largest generation in the labor force today, and they are pretty freaked out by their student loan debts. They move around from job to job, but deep down they just want some stability. They want to conquer their debt and start saving for retirement. At the same time, employers are desperately trying to reduce turnover rates within their organization.
Through all of this, shining like a beacon through the haze, is a benefits program that specifically addresses the top concern for student loan borrowers – a program that only 4% of companies have implemented to add to their EVP and better retain their top talent!
What Employees Want In Exchange For Loyalty
And just In case there is any doubt about the value of such a program in addressing the issue of employee turnover, consider this: in the Young Workers and Student Debt survey, 86% of employees said they would commit to working for a company for at least 5 years if that company helped them to pay back their student loans.
Even manager-level employees recognize the power of this tool in reducing turnover. In a survey by IonTuition, 70% of managers believe that offering an employer student loan repayment assistance program would improve employee retention.
Wrapping It All Up
Now, look, can we be real here for a moment?
This isn’t exactly rocket science. It’s not brain surgery, either. It’s common sense. You give people what they want and they will stick around. It’s as simple as that. People want help with their student loans. They need help. Is it any surprise that companies that offer employer student loan repayment assistance programs stand a better chance of reducing their employee turnover rates?
When I worked my corporate 9-to-5 job, I was miserable. Life became a continuous cycle of working and paying bills and paying back student loans (life is still pretty much like that, except now I am doing something I am crazy about: writing). It became easy to resent the job, which I was only lukewarm passionate about to begin with, and dread having to go into the office every day.
Truthfully, I never felt as if my employer cared one iota about my financial stability or overall happiness. If you’ve ever worked for a big company, perhaps you know the feeling. I was there to do a job, and if I didn’t like it, well then, goodbye and don’t let the door hit you on the way out! Bring in the next candidate! Over the years, I saw many talented, hard-working employees walk out. It was demoralizing.
A Final Word
As corny as it sounds, you have to realize that everyone out there, no matter what sort of front they put on, is fighting a very real personal battle. People are struggling. We could all use a little help. That’s not just business talk, and it’s not just an HR and recruiting tip. That’s just life, in general.
We should all be kind to one another. We spend more time working at our full-time jobs than we do with our families and loved ones. If we, as co-workers and fellow professionals, have the ability to make life just a little easier for one another, and we most certainly do, we should seize that opportunity.
That is what lies at the heart of employer student loan repayment assistance programs. Kindness. Caring. Helping others. And, hey, look – everyone benefits!
It says a lot about your company and what it is like to work at your company when you have implemented an employer student loan repayment assistance program. I’m not a very religious person. But, I think there is profound truth in the old gospel verse: “Give, and you shall receive.” Indeed.
I’m a 32-year-old writer based out of San Antonio, Texas, with my own mountain of student loan debt to conquer. When I’m not working, I’m either out for a run on the trails or chilling at home with my rescue dog, Vincent (for Van Gogh, my favorite painter). I like to eat (a lot), read (I’m a real horror junkie, with Stephen King topping my list of favorite writers), watch movies (Titanic – yes, Titanic – is the be-all and end-all for me), drink wine (red only, please), travel (Italy has my heart and always will), collect crystals, meditate, and read tarot cards. Perpetually single, but a softie deep down, I try to stay true to my hippie heart and find the good in every person and situation. I remain curious and open to learning new things (except for math which, I am convinced, will always be my downfall). If I can answer any questions about my work here on student loan debt and repayment assistance programs, feel free to shoot me an email. I don’t bite (usually). [email protected]
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