The Great Resignation has employers asking themselves: What am I doing wrong? Are my wages competitive enough? Am I reaching the right people? These are all important questions.
At Workmorphis, we help our partners ask themselves what they could be doing differently to stand out from the competition. Competing in a tight labor market requires an innovative approach when culture and benefits often matter as much or more to job seekers than compensation. One key factor that is increasingly driving candidates’ decision-making is student loan debt.
Student loans are making headlines for a variety of reasons. Notably, economic consequences are high when graduates delay investments for years because of student loan debt. In a post-COVID economy defined by flexible employment arrangements and work from home opportunities, 73% of millennials and 62% of Gen X respondents report delaying buying a home and putting down roots because of student loans. More than half of recent graduates are worried that they’ll need to work two jobs to make their payments. Another 38% delay saving for retirement, and 40% delay investing anything at all.
Recognizing the debt crisis faced by graduates today, employers can stand out by offering student loan repayment assistance to attract and retain top talent.
What is Student Loan Repayment Assistance?
Student loan repayment assistance is when an employer makes contributions to their employees’ student loans.
With 52% of employees expected to look for a new job this year, student loan repayment assistance will be a key differentiator in the competition for top talent.
Recruiting and retaining top talent is a primary goal for every successful business. Companies that are consistently able to recruit and retain that top talent do so by differentiating themselves with a trifecta: culture, benefits, and compensation—in that order. In this post we’ll review student loan repayment assistance as a perk.
Competition for Top Talent
The competition for talent was fierce even before the pandemic. During the pandemic, most people were grateful to have a job. Turnover was almost non-existent as people scrambled to figure out how to work remotely. We were all on edge as friends and family found themselves without work as businesses were forced to downsize or shut their doors. As we learned to adapt to the new normal, we had a chance to really focus on what was most important in our lives.
Now, as the country is opening back up, people are hesitant to go back to pre-pandemic norms. We are asking for more meaning at work and want jobs that provide us more than just a salary. Recruiting and retaining top talent has never been harder. In this new world, the competition for talent is brutal. The most successful companies are adapting to the times by improving their total compensation with better benefits fitting the needs of their teams.
One such company, Dolr, helps employees navigate their loans and find new ways to lower their monthly payments while offering a low-overhead, seamless, and integrated experience for employers. According to co-founder and CEO Naveed Iqbal, Dolr’s purpose is to “create joy” for borrowers by helping them repay their debts sooner while helping employers attract and retain top talent.
Student loan repayment assistance is the number one desired perk after health and paid time off. 90% of people surveyed by Dolr say they would commit three years of service for access to student loan repayment assistance. If you want to recruit and retain that top talent, you need to provide student loan repayment assistance.
Recent legislative updates allowing tax free, employer-sponsored payments to employees’ student loans have many companies considering the new benefit as a way to recruit and retain talent.
With 52% of employees expected to look for a new job this year, student loan repayment assistance will be a key differentiator in the competition for top talent.
The Need for Relevant Benefits
The global pandemic has impacted every aspect of our lives, and it’s changed our perspective on work as a result. A renewed focus on family, health, and financial security has many questioning whether their company is aligned with their life goals. As a result, better compensation and benefits is the top reason people are considering switching jobs in 2021. Employees are leaving in search of better culture, benefits, and compensation, and it’s hurting employers. A lot.
The Work Institute estimates the cost of turnover can range from 33% up to 200% of the departing employee’s salary. For a median income earner with a bachelor’s degree, that’s $18,051 per employee … on the low end.
The cost of lost productivity, replacement searching, the hiring process, and onboarding add up quickly. Not to mention impacts to team morale and continuity with customers.
This puts companies that successfully distinguish themselves in a unique competitive position. Not only will they save thousands of dollars from reduced turnover, their chances of capturing available talent improves drastically.
Employers are left with a few options: increase compensation or adjust their benefits offering.
Increasing compensation is a costly solution. Forbes estimates the average raise an employee receives for leaving is a 10% to 20% increase in salary. Shelling out that kind of cash to keep one or two of your star performers may make sense but is not sustainable company-wide.
Adjusting benefits offerings is a more reasonable strategy. Following the shift to remote work, many companies are already reassessing how relevant and impactful their offerings are.
Providing Student Loan Repayment Assistance as a Perk
Student loan debt is a societal problem requiring a societal solution. Providing student loan repayment assistance as a perk meets a real need for your team and is a relevant, impactful, and affordable solution. The demand for student loan repayment assistance as a perk continues to grow. To maximize the benefits of such a program to both employee and employer, it is critical to pick a partner that understands your needs.
About Workmorphis
Workmorphis provides a full suite of services to help organizations across the U.S. revitalize their workforce, including workforce planning strategies, skills transformation, diversified workforce pipeline strategies, employee support and empowerment, and more.
Connect with us at 877.999.7717 or info@workmorphis.com to offer your insights or learn how we can help you transform your workforce.
About Dolr
Dolr is a Columbus-based Fintech accelerating its members to $0 student debt by surrounding them with the help they need to tackle their biggest financial burdens. Dolr connects its members with extra cash for student loan repayment from where they work, live, and shop.
Meet the Authors
Naveed Iqbal is the CEO and co-founder at Dolr, a Columbus-based Fintech focused on tackling the student debt crisis by surrounding people with the help they need. He is experienced in data science with bank scale data and product development and delivery of consumer-facing financial products at the largest bank in the country. Naveed holds a PhD in Applied Mathematics from the Florida Institute of Technology. In his spare time, he enjoys reading, exploring the outdoors, and baking.
Emily Fabiano is the founder of Workmorphis, a cross-sector workforce consultancy helping organizations build a more resilient workforce to thrive in a changing economy. Fabiano has deep experience in workforce transformation at the government level, working at the cross section of workforce strategy, economic development, and public policy. With a keen understanding of the unique challenges facing today’s and tomorrow’s workforce and the ability to communicate across sectors, Fabiano brings a new level of understanding and collaboration required to connect industry and education and prepare people for jobs.
Nicholas Klein is a consultant at Workmorphis where he focuses on project execution and policy strategy. He specializes in labor market-driven solutions and is passionate about advancing policies that create economic mobility. Nick is a two-time graduate of The Ohio State University, earning his Master of Public Administration (MPA) from the John Glenn College of Public Affairs in 2022 and his BA in 2016. In between, he worked in the entertainment industry. His favorite things include action-adventure video games, history, indie and Americana music, and science fiction movies.
