The prospect of increasing your company’s retention rates may seem daunting or complicated, but recent findings show that competitive companies are expanding their employee benefit programs to help reduce student loan debt for their employees. Why?
The Work Institute reports that the cost of turnover is expected to increase to $680 billion by 2020, and smart companies are doing everything they can to get ahead of the curve and keep their top employees. Use our ROI calculator to see how much money you could save in retention.
According to a survey conducted by Common Bond in 2018, 86% employees facing student loan debt say they'd stay with a company if it offered a loan repayment benefit. This presents your business with a major opportunity.
Couple that with a recent IRS Private Letter Ruling that allows employees to repay their student loans and share in your company’s 401(k) plan, and it’s clear to see why helping them pay off student loan debt helps your company’s bottom line. Increase retention, while helping them pay off debt and secure funds for the future. It's a win-win that will keep your best employees around longer.
Here’s how it works: Employees make a student loan payment of at least 2% of their pay and the employer makes a matching contribution equal to 5% of employee pay into their 401(k) plan. This IRS ruling only applies to the Illinois-based health company, but it opens the door for companies like yours to make the same request.
Want to know what else innovative employers are doing to benefit from this new ruling? Here are 3 ways they’re taking advantage of an opportunity to increase employee retention and help conquer student loan debt: