Blog

03
Dec

Student Loan Repayment: A Cutting Edge Benefit to Recruit Top Talent

The need to recruit qualified workers is both a top priority and a competitive challenge for businesses today. There is a shortage of highly qualified workers and studies project that this shortage will grow. The Recovery 2020 report from Georgetown University Center on Education and the Workforce shows that in the near future:
• 65 percent of job vacancies will require some postsecondary education and training
• 6 million jobs will require a graduate degree
• 13 million jobs will require a baccalaureate degree
• 7 million jobs will require an associate’s degree
• 5 million jobs will require a postsecondary certificate

At present graduation rates, the US businesses will fall short millions of workers now and in the near future. This will create a competitive labor market for businesses to recruit qualified workers. And the competition won’t come only from US businesses. There is global competition for qualified workers. By 2020, there will be 38 to 40 million fewer workers globally with the skills and higher education that employers need. In addition, the Bureau of Labor Statistics predicts that the aging baby-boom population will also contribute to a decline in labor force participation through 2026. All these factors create a competitive labor market, and make it challenging for employers to recruit qualified employees.

Recruit qualified workers

Attracting the quality and quantity of workers that businesses need requires innovative recruiting practices. To recruit qualified workers who will contribute the skills a business needs, the business must offer the job candidates what they need. For today’s graduates just entering the workforce that means offering student loan repayment assistance. Student loan repayment assistance has a real impact on recruitment, retention and overall employee productivity, says Sangeeta Moorjani, head of workplace products for Fidelity Investments. “In the war for talent, solutions to address student debt can give employers a competitive advantage.”

Highly skilled top workers often have large amounts of student debt. The average 2017 college graduate had more than $39,410 in loan debt, up 6 percent from 2016. Because of this debt, job seekers may find benefits as important as salary. For young employees with student loan debt, repayment assistance is one of the most important benefits. However, only 4 percent of businesses offer this, according to SHRM’s 2018 Employee Benefits survey. Companies who offer student loan repayment assistance will be able to recruit qualified employees because they are meeting employees’ needs.

The February 2017 American Student Assistance Young Workers and Student Debt Survey showed how millennials think about student loan repayment and other benefits:
• 94 percent of young workers think employers need to consider more than just health insurance and compensation to retain good employees,
• 93 percent say they would take advantage of a sign-on bonus to specifically help with student loans,
• 92 percent say they would take advantage of a match, like a 401(k) match to help pay down their student loans
• 86 percent would commit to their employer for five years if they received student loan repayment assistance,
• 59 percent say paying students loans is a higher priority than saving for retirement later.

As the supply of qualified workers becomes tighter, employers will need to look beyond the standard practice of offering tuition assistance and other basic benefits. Edcor realizes the need for businesses to respond to employee needs by taking their tuition programs to a higher level. By making student loan repayment assistance an integral part of their benefits, companies signal that they are at the forefront of employee benefits.