For both employees and employers in the finance, insurance, and professional services industry, money is more than a byproduct of the job—it is the job. In this case, though, the old saying, "You've got to spend money to make money," is true. Many employees in the industry begin their professional journeys with expensive educations, and the result is student debt. Now there's a solution.
On May 1, CommonBond released "The Missing Benefit in Financial Wellness," a white paper focused on student loan debt in the U.S. and employer-led solutions to growing economic concerns. Its key findings were based on a survey conducted with more than 1,500 employees and 500 human resources executives from across five industries.
Among the industries in question were professional services firms: finance, insurance, consulting and professional law sectors. The data gathered offers insights into how student debt affects the professionally money-minded, and what can be done to alleviate it.
Boosting Talent Retention
With 43 percent of respondents reported currently having outstanding student loans, it's no wonder that more than three quarters of employees in this sector felt that their employers should help them with their financial wellness. An additional 76 percent specifically shared wanting their employer to offer student loan resources and tools. Likewise, 72 percent of human resources executives at these firms work at companies that offer financial wellness benefits, the second-highest of any industry.
Beyond demand, this research suggests that student loan benefits could act as a strong retention tool. About 85 percent of employees with debt (or planning to take out student loans in the next five years) said they'd be likely to stay longer at a company that offered benefits addressing their loans.
Despite this finding, student loan benefits in particular have yet to gain as much traction in finance, insurance, and professional services as they have in other sectors. Approximately half of human resources executives are planning on enhancing student loan benefits in the next three years, which was the lowest number of any industry analyzed.
Given that only 64 percent of human resources executives surveyed felt that their companies were ahead of the curve in terms of benefits offered—also the lowest of any industry in the survey—there's a chance to alleviate the concerns of debt-laden employees and forward-looking executives simultaneously. Human resources representatives can boost talent acquisition and retention by ensuring that their companies are innovative and competitive when it comes to benefits—and student loan benefit packages are on the cutting edge of what's available to offer.
An Opportunity for the Future
Addressing student debt is an opportunity for human resources executives in finance, insurance, and professional services to bridge the gap between the benefits programs they offer and the ones they want to offer—and as such, between the financial wellness programs of today and yesterday.
One such solution could be the implementation of a repayment benefit that grows over time. The longer an employee stays with a company, the more the company will pay toward their balance on a monthly basis. That way, employees with smaller amounts of debt are quickly helped, while those with larger balances will see their repayment gain momentum over time.
Another option is to give employees a choice: company contributions towards a 401(k) or a student loan payment. This option means all of your employees are better off, and could be life-changing for the 5 percent of employees in this industry with more than $150,000 in loans.
Whatever the decision, student loan debt in the industry must be addressed. Workers with extreme debt need benefits to help them become financially healthy, workers with lower amounts of debt will be grateful for aid, and workers without debt will be proud to work at companies where such important benefits are offered. And with finance companies like PricewaterhouseCoopers and PURE Insurance leading the way in terms of offering student loan benefits, organizations in the industry who don't do the same will have a difficult time competing in the talent arena.