Millennials. Albeit overused, it’s the word that keeps HR professionals up at night. How to hire them, how to engage them and how to retain them. As a fellow millennial as well as Vice President of People, I have found myself in a precarious position. On one hand, I’m acutely aware of what Millennials need and want to thrive in a work environment because, often, they are the same things I need and want. But I also understand how difficult it can be to build human resources policies that benefit a diverse team’s high expectations.
Regardless of how we HR people feel, Millennials make up more than 33 percent of the workforce so it’s only fair that we take a thoughtful approach to hiring, engaging, and retaining them.
When I started my first job as an HR Analyst after college, the advice I received from every “adult” in my life was “whatever you do, max out your 401(k)!” It seemed like my new colleagues didn’t receive the same advice – I was so surprised that even though we had a 401K match at my last two companies, an investment bank and an ad tech start up, my peers were still not contributing.
So what is prohibiting 20 to 30-year old’s from contributing to their 401(k)?
Student debt: the words that keep most millennials up at night. In fact, the average monthly student loan payment for a millennial is $351. So when you add student loan payments to rent, food and other necessities it’s nearly impossible for folks to even think about contributing more money out of their paychecks to anything like retirement that takes place so far into the future. That’s why more than 54 percent of Millennials would rather have a student loan benefit than a 401(k).
These early experiences in my HR career have instilled in me a passion for helping employees get on the path toward financial wellness. That’s why I chose to join CommonBond, a Financial Technology Company that is shaking up the HR and Benefits world by offering an innovative suite of student loan benefits called CommonBond for Business. CommonBond for Business is the new “401k for student loans" - it enables employers to contribute directly to their employees' student loan payments every month. Here, I am building a company that is creating innovative workplace benefits that can help other companies across the U.S. attract, retain, and engage their employees.
Here at CommonBond, we’ve seen firsthand that when an employer contributes to their employees’ student loans, employees are better able to save for retirement. Take our own company as a case study: in order to attract, retain, and engage our own workforce, we introduced a student loan benefit to our team 2015. We contributed $100 a month to anyone with student debt, to help them pay down their loans faster. 100 percent of our employees with loans took advantage of this benefit and now, we expect to save each employee more than $11,400, on average, and cut 2.4 years off the life of their loans. Our team has repeatedly mentioned that saving money on their student loans has enabled them to think more about their financial future including planning for near term investments and saving for retirement.
A recent study conducted by Willis Towers Watson mentioned that while student loan repayment programs are currently offered by just 4 percent of employers, that number could increase to 20 percent by 2018.
Having seen personally the successes of this benefit, I encourage all HR professionals to consider providing this creative benefit as part of their benefits package.