What do you know about the state of employees' finances?
Here's what employees are saying: they're stressed out.
Though the country continues to rebound from the great recession, people are still sinking under educational debt. Study after study has been illustrative: $1 trillion-plus in education loans, Millennials telling SHRM they're the most stressed; 81% of employees telling a MetLife study that financial worries were impacting their productivity. Student loans have even been cited as a cause of a recent dip in homeownership
Employees are speaking loudly. And employers, says Mark Ward, are listening.
Taking on Today's Employee Challenges
Vice President and General Manager of EdAssist, Mark says debt repayment as a benefit is a logical step.
It makes sense, he says. After all, employers expect people to arrive at new jobs with degrees in hand - more than 2/3 of jobs will require them by 2020
. And those degree programs are expensive - many costing $200 thousand and more.
Many companies already have programs in place to help students go back to school. And as Bright Horizons Senior Vice President Patrick Donovan pointed out during a recent webinar on financial wellness
, "Millennials are now saying, 'Well, I did go to school. Maybe you can help contribute to the debt that I have.'"
Educational Debt and Employee Financial Wellness
Mark calls the rollout of the new EdAssist LoanRepay
a direct response. The goal is to make loan repayment a viable benefit by providing the infrastructure to help companies enact it on a large scale. Building on the platform created for EdAssist's tuition assistance program, it automatically administrates payments while ensuring loan terms are met.
There's also a built-in educational component. For many young people with college debt, foundering is not just the result of insufficient assets, but also lack of knowledge. So the program includes expert guidance to help people minimize debt, increase their cash flow, and avoid costly mistakes.
Recruitment and Retention Benefits of Loan Repayment
More than an employee perk, Mark says EdAssist LoanRepay operates strategically for the employer. Loan Repay attracts employees; the pay down over the course of employment keeps them on board; the wide reach (education loans affect employees of all ages) confers benefit equity; and the stress busting (one-in-five employees told a Met Life study they'd missed work because of a financial emergency) supports productivity. Equally important, because money goes directly to the loans, it has only minimal effect on compensation strategies.
"As a benefit," says Mark, "it's much more tax efficient than handing an employee cash, and it ensures designated funds go toward their intended purpose - paying off the loan."
Keeping Up with the Employee Challenges
And Mark calls loan repayment a matter of keeping up with the times. Workforces are fluid - particularly today when Millennials are about to replace Boomers as the biggest demographic in the workplace. Even more to the point is the fact that, with the strengthening of the economy, quit rates are rising
as employee confidence increases and job seekers have more options at their disposal.
On top of that, Boomers are eying retirement, meaning there's a substantial talent shortage on the horizon. So to attract the attention of those critical top people, employers are realizing they'll have to be first out of the gate with the kind of solid perks that offer real returns and that catch employees' eyes.
"Students are graduating with increasing amounts of debt," concludes Mark. "Companies looking for creative strategies to attract and retain a highly educated, high value employee segment should be looking at ways to help alleviate it."