interested in taking the perfect benefits package proposal to your executive team and walking away with unanimous approval?

It’s no secret that student loan assistance is the hottest new benefit. Employers now have the opportunity to engage college-educated talent with a benefit that’s meaningful to them, and in-turn to reduce hiring timelines, extend employee tenure, and improve diversity.

When executives decide on whether or not to include student loan assistance in the benefits budget, most seek answers to the same three questions:1. How Many of our Employees Hold student Debt?

Across the U.S. workforce, 26% of people hold student debt. Onthe other end of the spectrum, 71% of 2017 graduates just entered

The 3 Questions Executives AskAbout Student Loan AssistancePreparing to receive budget approval for your new benefits program

By David Aronson

Employee Benefits and Wellness Excellence Essentials presented by HR.com | 11.2017 1

The 3 Questions Executives Ask About Student Loan Assistance

the workforce with student loans. Most companies fall somewhere in between, and the best predictor is often right at hand in your employee census. By comparing the age of your workforce with national statistics, you can quickly estimate the prevalence of student loans across your company, or within a division. This tool can get you started. 2. How should We structure our student Loan Assistance Program?

This is really several questions rolled into one. Who should be eli-gible? How much should we contribute? Should there be any special qualification criteria? Let’s look at all each.

First, defining eligibility. The most common approach employers take is to extend eligibility to all full-time associates, and for com-panies under 100 employees this is almost always the case; however, it’s not required. Some companies will prefer a phased roll-out of the benefit and the taxable nature of contributions means that student loan assistance can be offered to some and not others.

For companies seeking to focus their benefit investment on the area of greatest need (e.g., curbing turnover in the call center) or highest opportunity (e.g., securing new-hires faster), limiting eligibility for the first plan year can be a great approach. And while some companies will segment eligibility to a division of the workforce, others will limit eligibility to the area of greatest impact by making it only available to team members below a certain job level (e.g., Manager-level and below).

Second, determining the contribution amount. The median employer contribution we’re seeing is $50 per month. While many employers target $100 per month for latter plan years, it’s often smart to start low in order to:

(1) Pinpoint enrollment,(2) Minimize year-one budget, and(3) Save some goodwill to spread when you increase contributions

in a latter plan year.Employers today are not competing for talent on how much they

offer in student loan repayment, but they are competing on whether student loan repayment is offered.

Third, consider special qualification criteria. When companies see high turnover in the first few months of employment, they will may implement a three or six month holding period. In other words, em-ployees can participate in student loan assistance, after they’ve been with the company for the holding period (3 months) amount of time.

We typically recommend that companies avoid any other types of special qualification criteria (e.g., degree type earned, completion of degree, or time since a degree was completed), because they add sub-stantial complexity when manager, recruiters, and HR communicate the program to employees.3. What’s the Return to our Company?

This is actual a number of questions combined, as well. How manyemployees will participate? How much faster can we hire? How much can we save on employee turnover? Let’s quickly explore each question. Participation will be based on your answers to executive question #1 (i.e., how prevalent is student debt within the eligible population) and question #2 (i.e., does the plan include any special qualification criteria). In our experience, programs that are simple and well communicated will see participation from nearly 50-80% of the eligible employees that hold student debt. At the average company in tech, healthcare profes-sional services, or financial services, that means 25-35% of eligible employees (typically all full-time employees) will participate. This is an incredible opportunity for the company to engage its workforce.

Numerous studies have shown that job seekers are interested in student loan assistance and more willing to accept an offer that includes student loan assistance. By improving offer acceptance rates, employ-ers can keep managers focused on running the business rather than hiring, and spend less time and money filling the hiring funnel. The Millennial Benefit Preferences study found them 85% of respondents would accept an offer that includes student loan assistance. What’s your company’s offer acceptance rate?

Similarly, companies are seeing employees stay longer when student loan assistance is offered. Medix’s VP of People, Mike Ceretto, said “employees taking advantage of our company’s Student Loan Assistance program are very pleased with the benefit. It has helped us decrease turnover, attract better talent and most importantly positively impact our teams’ lives.” The Millennial Benefit Preferences study found that respondents, on average, would be willing to stay 36% longer when student loan repayment is offered. How much could your company save on the costs of lost productivity, rehiring, and retraining, when product employees stay with the company nearly 40% longer than they are now?

In conclusion, it’s important for HR teams to have a well thought student loan assistance plan when seeking budget approval from executives. Many companies count on their broker/consultant to design their medical plans and their carrier to provide the benefit; they count on an advisor to design their retirement plan and a record keeper to administer the plan.

With nearly three-fourth of college-graduates holding student debt, student loan assistance programs may soon be the third most important piece of the benefit package alongside health and retirement.

Employers would be wise to partner with a student loan assistance provider that can help them up front (and in subsequent plan years) with goal-drive plan design as well as administrative support for their HR team and employees.

Bonus: SHRM recently highlighted 3 core tenants for the effective design and implementation of Student Loan Assistance programs with insights from Nicole Skaluba (SPHR), Head of People, at Rise Interactive. B&W

David Aronson is CEO of Peanut Butter. He previously served as Director at Gevity (now part of Trinet).Visit www.getpeanutbutter.com Connect David AronsonFollow @davidaronson

2 Employee Benefits and Wellness Excellence Essentials presented by HR.com | 11.2017