© 2020 Thrive, LLC.
© 2020 Thrive, LLC.
Millennials in the Workplace: How To Attract and Retain Young Talent With a Wow Benefit
Attract and retain Millennial and Gen Z employees with student loan benefits.
Explore essential strategies for attracting and retaining young talent in the workplace. Our latest blog looks into game-changing approaches to connect with the priorities of the new workforce. Visit our blog now and revolutionize your benefits in one move. #Millennials #WorkplaceStrategy #TalentRetention
In the modern workplace, the looming specter of student debt has transcended from a personal challenge to a nationwide crisis. Student loans hit 44 million Americans and a staggering 70% of new college graduates. Furthermore, this financial burden ripples through millennials in the workplace, dictating career choices, housing decisions, credit prospects, and retirement plans.
As companies strive to remain on the cutting edge, integration of student loan assistance programs has become an attractive benefit. However, the stark reality is that most existing assistance programs inflict substantial financial strains on employers. Our blog explores the pivotal role of affordable, impactful employee benefits in attracting and retaining talent. These can help meet the needs of employees burdened by student debt, helping them navigate this competitive terrain.
The influx of millennial employees has led to a significant reevaluation of workplace culture and norms. As the first generation to grow up in the age of rapid technological advancement, millennials bring a penchant for innovation. They bring a different set of expectations for their professional lives. At the same time, a sad truth looms over like a dark cloud.
As headlines echo the narrative of a national financial crisis, the statistics unveil the issue. $1.8 trillion in student debt, over $60 billion in default, and a projected 40% default rate by 2023. Behind these daunting figures lie the stories of millions of college graduates grappling with the daily struggles of student loans. These are the same stories that might echo within your own company walls.
The urgency to address this challenge has spurred employers into action. Companies are rapidly adopting student loan assistance programs to attract and retain top talent. Yet, the dilemma remains for employers – how to provide meaningful assistance to their workforce without breaking the bank.
The relationship between employees' financial wellness and the strategic advantages it presents to employers underscores the impact of addressing student loan debt of millennials in the workplace. This underscores the urgency for proactive measures to support millennial employees grappling with this pervasive financial challenge.
In response to the impact of student loan debt on millennial employees, there has been a shift in employer benefits. An emphasis on student loan assistance programs grows, as these programs provide tangible relief to employees burdened by student debt. This also showcases an employer's commitment to the financial well-being of their workforce. This presents a pressing challenge: how can employers alleviate the burden of student loan debt without compromising other benefits?
While companies are increasingly responsive to millennials' need, a formidable challenge arises. The substantial costs associated with direct contributions becomes apparent. However, this strategy, while valuable for millennials in the workplace, raises concerns about its financial sustainability for employers.
Enter Thrive, an innovative budget-neutral solution. This flexible matching solution is tailored to address the student loan repayment challenge while aligning with existing retirement plans. Inspired by a 2018 private letter ruling for Abbott Labs, Thrive leverages its groundbreaking Flexible Matching Program to integrate student loan repayment assistance into existing retirement plans.
Conceived by David Krasnow, a distinguished retirement plan advisor, and his team, Thrive not only offers relief for millennials in the workplace. It also facilitates a dual financial strategy by simultaneously supporting retirement savings.
To address the challenges faced by millennials in the workplace, Thrive stands out as a groundbreaking solution. The unique proposition lies in Thrive's Flexible Matching Program, which empowers employees to allocate a portion of their salary. This can go towards student loan repayment and/or retirement savings, depending on their needs. Additionally, employees can leverage their employer's matching funds, deciding how to distribute these funds.
To illustrate the flexibility offered by Thrive, consider three distinct scenarios reflecting the diverse life situations of employees:
Crucially, Thrive's innovative model grants employees' control over their financial strategy without incurring any additional expense for the employer. The program enables employees to make informed decisions about their contributions. It also caters to the unique needs of millennials in the workplace.
The increasing prevalence of student loan debt has intensified the battle for recruiting and retaining college-educated workers. Employers, striving to attract top talent, recognize the pivotal role that meaningful benefits, including support for student loan debt, play in this landscape. Millennials in the workplace also seek employers willing to address this financial obstacle.
Consider a scenario where two companies compete for a promising graduate: Company A, offering a standard benefits package, and Company B, not only presenting a competitive salary but also providing a tailored student loan repayment assistance program.
Company B's benefits become irresistible, positioning them as an empathetic employer invested in their employees' financial well-being. This underscores the crucial role of student loan assistance programs in shaping recruitment and retention strategies.
Despite the appeal of student loan assistance programs, employers often question whether an employee can contribute to their retirement account while directing the full matching amount into Thrive.
The answer is no, as this would violate the terms of the employer's Retirement Plan Document. Thrive simplifies the entire process for both employees and employers. They handle all back-end administration, including payments to each participant's student loan provider. This customizable retirement and student loan repayment program also puts employees in control without adding extra costs for employers, offering a budget-neutral "Wow" benefit.
Enhancing the attractiveness of Thrive is the CARES Act, passed in March 2020. This allows employers to offer a tax-free student loan benefit of up to $5,250 per employee per year. This tax-free benefit aligns with employer and employee interests, reflecting the growing impact Thrive is poised to have on employees.
As companies grapple with the challenges of addressing student loan debt while ensuring a competitive benefits package, Thrive's innovative use of existing employer matching funds to aid employees in repaying student loans, all without increasing the benefits budget, represents a transformative approach.
This program not only provides much-needed financial support for millennials in the workplace but also positions itself as an essential tool for progressive employers looking to attract and retain top talent. Thrive's commitment to addressing the evolving needs of the workforce without compromising financial sustainability makes it a strategic and forward-thinking solution.
To explore how Thrive can work for your company and contribute to the well-being of your employees, visit www.thrivematching.com or call 216-595-0700, ushering in a new era of employee benefits that resonates with the priorities of the millennial workforce.
