Today’s job market is as competitive for hiring companies as it is for job applicants. This challenge is causing companies to look for new ways to differentiate themselves and may have your own HR department considering a new concept: student loan repayment and relief. These programs, which are gaining popularity with employers across multiple industries, help to alleviate stress in employees saddled with student loan debt and are a powerful tool in attracting top talent.
It’s no secret that U.S. student loan debt has a massive impact on the overall American economy. Driven by increased demand for college-educated employees, tuitions have increased sharply in recent decades. A high school education simply doesn’t cut it anymore. To compensate for this higher barrier in the workforce, young adults are enrolling in college and applying for financial aid. As a consequence, the average recent graduate owes more than $35,000 in student loans.
U.S. student loan debt recently topped $1.5 trillion, a deficit that certainly impacts the most recent crop of college graduates. While this millennial audience is certainly the most vocal about asking for relief programs, workers in their 30s and 40s bear the highest student loan balances. Likewise, many people in their 60s have also taken on educational debt on behalf of their children and grandchildren.
Attract and retain top talent.
While few companies currently offer student loan relief programs, the tactic is gaining momentum. The U.S. economy has strengthened in recent years and unemployment rates have declined, making the job market tight and increasing the overall competition for talent. In addressing these factors, companies across various industries have adopted student debt relief programs. In fact, this new employee benefit has around 23% of companies considering student loan repayment, according to a recent report.
Several firms have already implemented similar programs, including:
- Estee Lauder
- Fidelity Investments
- Penguin Random House
In a recent interview with The Wall Street Journal, a department head with Fidelity Investments said the company has seen a 75% reduction in turnover among employees in their student debt relief program, saving the company the tremendous expense of hiring and training new employees, and boosting employee retention and morale.
We can help.
Employers that offer professional development opportunities, hire internally, carefully cultivate their company culture, and layer accountability through training often find themselves in a position to build on past success with an eye toward the future. Management training and succession planning can benefit an organization for many years to come. Our experienced team of HR professionals can help managers unlock the hidden potential for staff in surprising ways.
At SourcePointe, we utilize our industry experience to provide you with a multitude of customizable HR services, support, and solutions. All so your business can do one thing – more business. We’ll provide tailor-made solutions that fit your company’s needs while providing a solid return on your investment that pays off immediately – and for many years after that.Back to Insights