We’ve talked about investing in your employees before and how it can help with recruitment and retention. When most employers think about investing in employees, they think about making a future investment to benefit their company with things like training or continuing education.
But what about looking backwards?
Many companies are looking to recruit today’s top talent, but that often means hiring recent graduates who may have significant student loan debt. One of the biggest benefits that we can offer them is helping them climb out of debt. When those student loans kick in, it can be a real eye opener for them, and they may end up asking for a raise or looking for a higher-paying position.
You could be the company that says, “Come work for us, and we’ll help you pay off your loans.” That sounds like a pretty attractive offer to new grads, and it has huge potential for employee recruitment and retention.
It’s not as odd as you think
Plenty of companies provide tuition reimbursement for employees that want to continue their education. They pay for education that’s happening in the future, so why not education that happened in the past?
Some companies who recruit talent from across the country pay relocation assistance as part of the hiring package. It’s an added incentive that can help with recruiting top talent, just as tuition reimbursement can.
Tuition reimbursement packages and relocation packages are often structured in a way that protects the employer’s investment. That typically means an agreement that the employee will work for the company for a set number of years or they must pay some or all of the benefit amount back to the employer.
Figuring out the details
If you use a student loan repayment package as a recruitment bonus, it can be structured in a similar way to tuition reimbursement and relocation packages. It’s also similar to something like a tiered 401(k) employer match, which is a benefit that isn’t salary but is somewhat salary-like.
A lot of companies think they can’t afford a benefit like tuition reimbursement, whether for future education or paying student loan debt. But do the math on that compared to the math on incremental raises when employees say they need more money to pay their bills. If you take some of what you’ll end up paying in raises and invest that in helping them pay off student loan debt, it helps take some of the financial burden off that employee’s shoulders.
There are some employers out there starting to offer student loan repayment benefits, and it’s something that employers of all sizes can consider as part of their total benefits package. You can also pair the benefit with financial education for employees—bring someone in to teach employees about budgeting and investing to coincide with that added benefit. Financial education is something professional sports teams have even started doing for rookies to help their youngest players learn how to budget and determine what money they’ll spend and what they’ll save.
If you want to provide your employees with an incentive for both recruitment and retention, student loan repayment can be a great option. It’s beneficial for both you and your employees, and if you’re willing to make the investment, you’ll reap the benefits back in loyalty and productivity.
Thinking about student loan repayment benefits or other creative benefits to help recruit and retain employees? WhyHR can help you assess your total benefits and create the right plan for your employees.