I attended a Human Capital Seminar / Conference last year at the PGA National in Palm Beach Florida. Whenever I attend one of these events, I am always amazed that over a three day period of seminars that feature distinguished guest speakers and industry experts; the solutions that are presented are something so simple that was in front of me all the time; yet something I never even thought of that provided the answer I had been looking for – and this conference was no different.
One simple ideal I took away from this conference, was from an HR women from a major bank whose name escapes me. She had talked about implementing an employee survey throughout their organization and being surprised by the results. She spoke of the majority of their young financial planners who were providing financial planning to their customers did not take their own advice. To address this need, they decided to implement free annual budgeting assistance to all their employees. In addition, they would receive $500.00 and two paid days annually to address their financial concerns. This one benefit improved their retention, improved employee morale and they received high marks as one of the best places to work for in America.
At about the same time this was going on the Presidential Race was heating up and many of the young protesters voiced their concern about their mounting student loan debts. In some cases explaining the need to live in their parent’s basements as a result. From this, example, I made the decision to introduce out of the box thinking to compete for the brightest and best recruits for one of my organizations at the time who was struggling to recruit & retain talent.
Too often I hear from clients that they are having a hard time recruiting talent and blame everything from their business’s location to competitive salaries. There are numerous ways to address retention, but for this particular writing I will focus on one that relates to recruitment, and that is to consider implementing a student loan matching fund.
Companies who provide a matching 401k or, Pension Plan provide better retention that those who don’t. Employees are less prone to leave and weigh their decision more when a retirement plan exists especially one where the employer makes a considerable contribution. In today’s economy, benefits have been forcibly reduced from health care to retirement in order for businesses to exist and remain competitive. For this reason, I introduced a matching Student Loan Re-Payment Plan to one of my national clients. When introduced, the plan was received well from the top down.
Turnover can cost as much as 1.5 to 2 times an employees annual salary between recruitment & training costs associated with the acquisition of talent. The concept introduced, is first to identify the organization’s current recruitment and turnover costs then allocate a percent of the recruitment budget into a Matching Student Loan Re-Payment Fund. Example of how it would work.
- The student decides the monthly amount they are comfortable committing each month towards their debt.
- Then the student provides the appropriate paperwork to HR to direct pay the Lendor.
- The organization matches that amount in this case up to $300.00 a month.
This allocation can be contributed from the Recruitment Budget therefore not adding any additional expense but theoretically reducing costs over time. In addition, this makes for strong recruitment marketing at colleges & universities. Retention is sure to improve as those locked into such programs are more reluctant to leave while their debt load is being lessened.
