Student debt is a crisis that is affecting 44 million Americans and 70% of new college graduates. These recent grads are our current and future employees, but their debt is affecting their job search, credit and retirement. In response, several companies are adding student loan assistance programs, but odds are this will end up costing the employer a significant amount of money.
Like organizations across the nation battling to attract and retain talent, the issue has likely been elevated to your executive team to help determine a course of action to solving the talent shortage that’s been hitting industries for months. Procurement is currently collaborating with HR to find solutions for the tight labor market, and a unique new budget-neutral solution for employers could set your business apart from the competition bringing an influx of prospective employees. As a procurement professional, you’re in the best position to work with your group purchasing organization (GPO) to bring solutions like this to your company to help mitigate the talent shortage.
Your GPO offers immediate access to resources to help you attract and retain talent, such as the Thrive’s Flexible Matching Program. Let’s take a closer look at how this cost-effective solution can give your company a competitive edge in the hiring process.
Understanding HR & Employee Needs
The common theme is stress. Recent graduates and those with remaining balances on their student loans are feeling large amounts of pressure as they work to pay off their debt, and HR departments are pressed to source high-quality talent and keep great employees around. Those in the job search say that salary isn’t their only concern, many are also heavily focused on a meaningful and relevant benefits package.
Recent surveys show:
- Among millennials, student loan repayment is the #2 most desired perk.
- More employees (59%) are asking for help paying off their student loans than putting money in a 401(k) to save for retirement (41%).
- 95% of professionals under 30 with student debt would be more willing to accept a job offer if the benefits included student loan repayment.
- The number of companies offering student loan benefits increased from 4% in 2019 to 34% in 2021.
The Issue: Student Loan Assistance is Costly for Employers
Employers see the need for student loan assistance programs, and some are even providing this option for their employees. However, they quickly realize the major additional expense it’s become for their company. If you offer $150 per employee per month and 200 employees participate, that adds $360,000 of spend per year. The good news is through group purchasing, procurement professionals have immediate access to industry-leading solutions that won’t increase their company’s benefits budget.
The Solution: Use Existing Matching Dollars for Student Loan Repayment
Thrive’s Flexible Matching Program can give your employees an opportunity to make contributions and use 401(k) and 403(b) employer matching funds towards their student loan repayment.
Thrive enables employees to contribute a portion of their salary to student loan repayment and/or retirement savings, while also allocating some or all of their employer’s matching funds to help pay their student loans and/or save for retirement.
- Example: If an employer’s retirement plan has a dollar-for-dollar matching provision up to 5% of an employee’s salary, an employee can determine the percentage of their contribution and the percentage of the employer’s match to allocate to retirement and student loan debt.
- Employers often ask: Can an employee make a full contribution into their retirement account while directing their employer to put the full matching amount into Thrive? The answer is no. Doing so would violate the terms of the employer’s Retirement Plan Document, which is the governing body.
While providing flexibility and control for the employee, Thrive handles all back-end administration, including making payments to each participant’s student loan provider (employee contribution and employer match), as well as providing employee notification of payments made and real-time tracking tools.
Thrive & OMNIA Partners
Through a group purchasing strategy, your procurement team can help HR and your company to maintain success during the current labor shortage expected to continue throughout 2022. OMNIA Partners cover all strategic spend categories that organizations face both inside and outside of procurement, making OMNIA Partners, Private Sector purchasing’s leading resource.
Thrive empowers employees to allocate their Employer matching dollars where they need it the most: Retirement, Student Loans, Emergency Savings Account, 529 College Savings, or a combination of all four! Now, members of OMNIA Partners can provide their employees with this new and innovative employee benefit program aimed at eliminating student loan debt while helping employees save for retirement.
To learn more about how Thrive would work for your company and employees, visit www.thrivematching.com or call 888-991-1322.