This week, CommonBond is proud to announce the completion of a months-long study on financial employee benefits, one of the largest of its kind. This study surveyed more than 1500 employees and over 500 human resources executives at a variety of organizations across five industries: finance/insurance, health care, automotive/manufacturing, retail, and technology.
The results of the survey have been published in a white paper that was officially released this morning. Here are some of the major takeaways from our research:
Who Is Impacted by Student Debt?
Student loan debt is a bigger challenge than ever. Americans owe a total of $1.4 trillion on their student loans, with an average of $31,172 on each borrowerâ€™s balance. Of the 1500 employees CommonBond surveyed, 72 percent reported having borrowed money to pay for school.
There's a common misconception that student loan debt is a millennial problem, one which exclusively affects younger workers. In actuality, 59 percent of employees aged 22-44 currently have outstanding student debt, but 21 percent over the age of 45 have it as well—many of whom took out loans for their children or other family members. Additionally, 21 percent of employees of all ages reported that they planned to take out loans for someone else within the next five years.
What Is the Impact?
The result of all of this debt is a heavy toll taken on the people who carry it. Only 26 percent of employees without student loan debt reported worrying about their personal finances "most of the time" or "always," but the number doubled for respondents with student debt.
The toll goes beyond the psychological, as workers with debt are putting off both major expenditures and future planning. Nearly half of employee respondents with student loan debt noted that they had postponed important life events due to their finances, including saving for retirement.
Benefits Programs Don't Reflect the Needs of Workers with Student Debt
One positive takeaway from the survey is that efforts to address this debt crisis aren't being hampered by a lack of interest. Ninety-five percent of human resources representatives believe that organizations have a responsibility to help their workers with their financial wellness.
That said, an informational disconnect between HR departments and their employees still exists. The result is that human resources representatives have an understanding of employee needs that more closely reflects those of workers without student debt. The HR representatives CommonBond surveyed most commonly mentioned healthcare and retirement savings as the two financial matters they thought employees worried about, and they most often mentioned the same ones as benefits they were likely to focus on enhancing in the next three years.
These perceptions reflect reality for workers without student loan debt, but for those with debt, concerns regarding student debt and retirement were even. Development of student loan repayment benefits, though, is only on the radar of 25 percent of HR representatives surveyed. Still, human resources representatives ranked student loan repayment as the financial wellness benefit that they believed worked best in attracting and retaining talent, so there's hope that more companies will begin offering these types of benefits. By offering benefits that address student loan debt, employers will ensure a brighter financial future for their employees.
Employees Want the Right Benefits Packages
Benefits are a crucial part of any employment experience, as a majority of workers interviewed agree. Seventy-eight percent of respondents said they would accept a job offer if it included student loan benefits, and 83 percent said they affect whether or not they stay with a company. Unfortunately, many of those workers aren't getting what they want—while 71 percent of HR representatives believe their companies offer innovative benefits, only 50 percent of employees agreed.
Repayment and other student loan benefits can help bridge that gap. Eighty-six percent of employees who either had student debt or planned to take out loans within five years said they'd be more likely to stay at their current company if they were offered student loan repayment. Of those respondents, 85 percent said that if given the benefit, they'd commit to stay for at least three years.
The effects would go beyond recruitment and retention, though. With fewer financial worries distracting them, 70 percent of employees with debt said that student loan benefits would improve their performances at work.
How to Implement an Effective Plan
Perhaps the greatest takeaway from CommonBond's research is that addressing student loan debt via a benefits package is very much within reach for most organizations. The steps that it takes require careful planning and resources, but they can help make any company a competitive force in finding and retaining the best talent. More importantly, they can also help an organization make a meaningful difference in the lives of its employees.