Support Your People as They Level Up
As HR leaders, you’re faced with a global talent shortage and confronting competition for your current employees. The modern employee regardless of age cares about more than a paycheck. In today’s talent market, HR and people teams work hard to cultivate an incredible workplace culture, complete with support programs for employee engagement, health and wellbeing, and inclusive benefits regardless of whether an employee is back to workplace, hybrid, or remote. So, how do you stand out in a competitive fight for talent? How do you signal to employees that your benefits are empowering the kind of workplace that’s worth committing to?
Your people need to know you get it, and you get them.
You understand what employees want and need, and individually. At the forefront of many minds today is how to pay off crushing student loan debt. This debt makes the life your people envisioned for themselves feel untenable. And you can’t assume this only impacts your recent grads; student loan debt spans the ages. Your employees may be delaying marriage, putting off or reconsidering whether they can afford to have children, fearing they will never be able to save for a down payment on a house, or choosing not to save for retirement. Permeating many of life’s greatest decisions, student loan debt looms large.
Unfairly burdensome debt
- 62% percent of the class of 2019 graduated with student debt (1)
- Among these graduates, the average student loan debt was $28,950
- The average U.S. household with student debt owes $57,520 (2)
It’s more likely that you’ll be hiring or trying to retain employees with significant student debt than without. With the U.S. federal government’s moratorium on student loan payments ending on August 31, 2022, the reality of these payments has hit hard in a few short months. Your people are looking for creative ways to budget to afford these renewed payments. The best culture companies must be willing to offer their employees some much needed relief.
For now, let’s consider what faces your employees looking to level up their education:
- For the class of 2019, the average graduate degree loan was $71,000
Now think about your company’s employee, paying off their student loan debt at a household average of $500/month (SmartAsset Loan Calculator). They are rightfully hesitant to triple that debt and subsequent payment. Even in pursuit of an advanced degree that holds the promise of a promotion and greater earning potential. Without another path toward growth, they may not be willing to take the financial risk. It’s a no brainer to alleviate this pain point by offering tuition reimbursements to keep their career moving forward. They can study wherever they find themself on the globe, knowing their costs will be compensated.
Or you can take it one step further, offering the unique benefit of student loan repayment assistance. In 2021, U.S. corporations spent nearly $180 billion annually on learning and development with $28 billion being a tuition reimbursement. (3) No matter what educational benefit you choose to present to your team, it will be a difference maker.
Delivering a Return on Culture Investment®
Just over half of U.S. employers provide tuition reimbursements for undergraduate or graduate degrees, according to SHRM’s most recent Employee Benefits report. Education benefits can be surprisingly affordable for employers and help prime people for growth. Benefits that cover educational costs can be tax-free for the employee up to $5,250 per employee and remain a business deduction for the organization. One of the most prominent case studies of tuition reimbursement programs involves major health insurer, Cigna:
- From 2012 to 2014, the company invested in its educational reimbursement program. An analysis of the program’s impact reveals that for every dollar Cigna spent on reimbursement, the organization got back $2.29, as a result of reduced turnover and lower recruiting costs
- Employees also reaped rewards. They were 10% more likely to be promoted, seeing a 43% increase in wages over a three-year period
Lifestyle Reimbursements: A Culture Win
Impact your People with Tuition Reimbursements, An LSA Benefit for Today’s Workforce
- 45% of Millennials report they would change jobs for tuition reimbursement benefits (Gallup)
- According to a Bright Horizons survey of 22,000 participants in tuition reimbursement programs, 80% were more likely to stay with their employer
You have an almost 50/50 chance of losing an employee if you don’t offer tuition reimbursements, but an 80% chance of keeping them if you do. Recognize what your people value and hold close to their hearts. Provide a rewarding benefit that allows them to invest in what matters to them. Whatever they choose, they will attribute their freedom to make these decisions to your company. This gratitude inspires loyalty. Be the high-EQ company where loyalty thrives.
Reimbursements + Allowances Platform for a Happy Workplace
(1) Source: 2022, The Institute for College Access & Success, a nonprofit organization that works to improve higher education access and affordability
(2) Source: NerdWallet 2020 household debt study
(3) Source: 2022 Study from The George Town University Center on Education and the Workforce
NerdWallet, Student Loan Debt Statistics 2022
SmartAsset, Student Loan Calculator
Forbes Advisor, 13 Companies That Pay Your Student Loans