Find out what monetary incentives may offer more value than a salary bump.
Research has found a number of young employees are struggling to pay back hefty college loans — which can take a toll on their performance.
One in four millennials owe more than $30,000 in student loan debt, according to a survey from ORC International and PadillaCRT; and those workers may be tempted to seek a new, higher paying job, regardless of whether or not they’re happy with their current one, to help offset their loan repayment.
Thirty-seven percent of women and 25 percent of men, in fact, say they’re less likely to remain with their current employer because of their financial situation. A separate Gallup report found one in two millennial workers would consider switching companies for a 20 percent or less raise.
Millennials’ fiscal motivation to move jobs could potentially cause a retention problem for some employers; however, other research indicates companies may be able to offset in-debt employees’ desire to leave by offering financial benefits that provide guidance and assistance — such as:
An Employer Student Loan Repayment Program
Nearly two-thirds of the working adults who participated in a 2016 IonTuition survey said they’d experienced difficulties making their student loan payments. Helping employees reduce their education-related debt can show them you appreciate and are investing in them on a long-term basis. More than half (59 percent) say they’d value student loan assistance, such as an employer student loan repayment program, over other employee engagement offerings, including workplace flexibility, according to ORC and PadillaCRT’s findings.
Although a 2017 Society for Human Resource Management report on employee benefits noted the number of organizations that offer undergraduate and graduate employer-provided educational assistance has declined over the past five years, there’s evidence tuition reimbursement programs can be beneficial.
A study involving health insurer Cigna’s employer-provided educational assistance program found helping employees fund college or technical training helps attract and retain valuable talent — in an economic way. Employees who participated in the program were 10 percent more likely to be promoted and eight percent more likely to stay with the company; in addition, each dollar Cigna put into the employer-provided educational assistance program was found to save $1.29 in talent management costs.
Financial literacy programs
Employees’ monetary situation may seem to have no correlation to their work; however, 40 percent of employers report their employees are only a little bit or not at all financially savvy — and four out of five employers say workers’ personal financial issues are either somewhat, very or extremely impactful on their job performance, according to an International Foundation of Employee Benefit Plans report.
Offering financial wellness programs in the workplace and tools to help employees increase their money management skills may help lessen that effect. Sixty-seven percent of employers that have offered financial literacy programs say their initiatives have been successful. Popular types of assistance include free consultation services, voluntary classes and online resources.
The amount of organizations that offer some type of financial advice — either online, individually in-person or in a group or classroom setting — has increased in recent years, according to SHRM; as of last year, nearly half (49 percent) of companies provided financial wellness programs in the workplace of some kind.
For more about offering desired, cost-effective employee benefits, view our blog posts on sizing up what amenities competitors offer; employee satisfaction drivers to watch; using benefits to enhance employee engagement — and flexible hours-related best practices.