More employers are adding repayment of student loans to their benefits packages as a way to attract talent in an increasingly tight job market.
It is a way to increase employees' financial and mental wellness so they can concentrate on the job with one less external pressure, according to John Wilson, director of enterprise portfolio management at Benefitfocus. The Charleston, South Carolina-headquartered company, founded in 2000, provides platforms and technological backup for employers.
Offering both new recruits and existing employees financial support to pay down student loans is one of the main trends of 2017 identified by Benefitfocus. There are key elements when considering student loan repayments as part of a package offered to employees, Wilson told HR Daily Review. He recommends companies have software in place to make educating management and employees on the best way to facilitate loan repayment programs.
"Small, medium, and large companies are offering this to compete for talent," Wilson said. "The job market is getting tighter and tighter and companies are competing for the same pool of talent."
Personal finance is the single greatest source of stress for employees, Wilson says, and one that hurts everyone's bottom line,
In a Benefitfocus blog post, content specialist Logan Butler said employers who implement comprehensive financial wellness and education programs can help employees gain firmer financial footing.
"And since student loan debt is for many employees (not just the young ones) the primary antagonist, employers should make sure to target that area," Butler said. "Student loan debt education, consolidation and repayment will likely be crucial components of benefit offerings for organizations looking to recruit and retain top performers. With the burden of student loan debt lightened, employees will not only be more engaged and productive at work, but also be able to afford to invest more in their long-term financial security."
In a post on Forbes.com, personal finance expert Zach Friedman cited a 2015 American Student Assistance survey to argue that it is likely more millenials, and the next generation, will look for loan repayment elements in any compensation package..
Just over three-quarters of respondents said a prospective employer offering a student loan repayment benefit would be a deciding or contributing factor to accept the job.
But Friedman, using information from the Society for Human Resource Management, said only 4 percent of companies offer such a benefit.
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