Finding the right employees for your business and getting them in the door is one thing. Getting them to stay is another. Retention is a fast-growing concern among American businesses. In 2012 only 25% of companies listed it as a top concern. Four years later, 46% of companies listed it as their top concern, making it the number one HR challenge, according to Employee Experience as a Business Driver, the 2016 SHRM/Globoforce Employee Recognition Survey.1 To meet this challenge and retain workers, businesses must take action and offer benefits that improve the employee experience.
Today the “employee experience” often includes financial struggles with student loan debt, especially for younger employees. American Student Assistance, a private nonprofit organization dedicated to eliminating financial barriers to education, surveyed young workers. The Young Workers and Student Debt Survey shows that student loan debt is in the forefront of many workers’ minds.
- 54% of young workers say they will pay student loans first and save for retirement later
- 44% of young workers say they have no idea how they will pay off their student debt
- 40% of young workers said they worry about how student loans have impacted their health
- 31% of young workers said out of all financial obligations they worry most about student loans
- 26% of young workers said they worry about repaying their student loans all the time
- 30% said they worry about repaying student loans often and
- 25% they worry sometimes2
For employers today, this concern over student loan debt presents an opportunity to connect with young employees, and create an employee experience that promotes retention. One in three employees leaves a job within two years, a survey by Willis Tower Watson shows.3
This creates a financial burden for businesses. Statistics from the Small Business Administration show that turnover costs employers with fewer than 1,000 workers about $3,079 per hire. There is a risk to productivity with turnover says Laurie Bienstock, global head of talent management for Willis Tower Watson. “Employees need five to nine months to reach their full productivity, depending on their duties. New employees can create a productivity drag for managers and fellow team members, which adds significantly to the cost of turnover.”3
A Bersin by Deloitte report says that the true cost of losing an employee are even higher when businesses look beyond first-year orientation and training. It also includes interim reduction in labor and lost productivity costs. “Bersin by Deloitte estimates that organizations lose more than $100,000 for every employee who leaves. And this doesn’t include other indirect costs such as lost client relationships, institutional knowledge, and previous training for the employee leaving.”1
Benefits that help employees reduce their student loan debt can help businesses increase retention rates and reduce the tendency of young employees to hop from one job to another. The ASA survey shows that young employees are looking for employers that are innovative in what they offer in exchange for employee talents.
- 86% of young workers say they would commit to their employer for five years if the employer helped pay off student loans.
- 94% of young workers say that employers need to consider a lot more than just health insurance and compensation to retain good employees
- 92% say that employers need to always think about refreshing their benefits package
- 51% of young employees says that student loan repayment is the most important benefit to them, behind health insurance (82%) and 401K match (74%).2
It’s clear that employees would like to have assistance from employers to manage their student loan debt. SHRM statistics show that right now only 4% of employers offer student loan repayment as a benefit. However, Willis Towers Watson predicts that this number will grow to almost 20% by 2018.4
In the tight labor market today employers need to find the key to employee retention. The employers who will have the best advantage are those that recognize the key to retention is in benefits that employees value. Student loan repayment assistance is the benefit that meets employee needs, helps businesses retain valuable employees, and creates an advantage for both.
1. Employee Experience As a Business Driver. 2016 SHRM/Globoforce Employee Recognition Survey. Accessed 5/16/2017.
2. American Student Assistance Young Workers and Student Debt Survey Report. Accessed 5/16/2017.
3. Short timers: Why people job hop and how employers can ease the cost. Accessed 5/16/2017.
4. Perspectives: Employers explore student loan assistance strategies. Accessed 5/16/2017.