The days when employee benefits were health insurance and paid vacation are just a memory. Today businesses offer a wide range of benefits, many that have two important functions: to meet employees’ needs and to differentiate the company from others. A benefit that falls into this category is student loan assistance.
Student loan assistance, one of the newest benefits employers offer, helps businesses meet many management and personnel challenges. At the same time it fills the needs of many employees and makes their company a satisfying place to work.
Businesses need to differentiate
All businesses face the challenges of recruiting and retaining qualified workers. They need to build a strong workforce that is able to meet the challenges of a rapidly changing global market. The challenge is here and now, and growing stronger.
The field of data science is a prime example. In 2017 Data scientist was listed at the top of the list of the top 10 most in-demand positions; the Business-Higher Education Forum and PWC estimate that there will be 2.7 million postings for data science and analytics jobs in 2020. A Gallup poll for the Business-Higher Education Forum predicts that by 2021, 69 percent of employers will give hiring preference to job candidates with data science and analytics skills. However, data science is a new relatively new field and there isn’t a large talent pool of professionals for employers to draw from. Many schools do not yet offer specific data science degree programs, and colleges say that only 23 percent of their graduates have the necessary skills.
And businesses don’t even have to wait until 2020 or 2021 for this competitive job market. It’s here now. Yoh Services, a workforce solutions provider to US tech companies, estimates that the best technical job candidates are generally off the market in 10 days or less. This kind of urgency creates a need for a business to stand out from other employment opportunities.
One way for a business to do this is to offer student loan assistance to its workers. The positions that businesses are struggling to fill require higher education, and a large percentage of the American workforce has student loan debt that financed that education. More than 44 million Americans, almost one in every five adults, now have student debt.
This means that a large percentage of the people who have the skills employers need are burdened by this debt.
Employees want assistance
Offering a meaningful student loan assistance benefit helps employers differentiate their employment opportunity from others. In a 2015 American Student Assistance Survey, 76 percent of the people said that if an employer offered student loan assistance, that would be a contributing or deciding fact to accepting a job.
A 2017 American Student Assistance survey illustrates how student debt is a significant factor in the lives of many young workers:
• 31% said they worry about most about their student loans out of all their financial obligations
• 56% said they worry about their student loans all the time or often and 25% worried about them sometimes
• 59% say that paying off student loans is a higher priority than putting money in a 401(k) for retirement
• 92% say they are likely to take advantage of a sign-on bonus to specifically help with their student loans
Companies who offer this student loan assistance will stand out from others. Currently, only 4 percent of employers offer student loan assistance as an employee benefit, according to the Society for Human Resource Management (SHRM). The strong interest in this benefit is bound to bring change: Advisory company Willis Towers Watson predicts that this number will grow to nearly 20 percent in the near future. There is value for both employees and employers in student loan assistance that financially benefits employees while it builds a strong workforce.
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