designing student loan benefits: three emerging models€¦ · speakers sue krause consultant,...
TRANSCRIPT
Speakers
Sue KrauseConsultant, Enterprise Solutions
15+ years in process design, technology implementation, and growth strategy
Alan RobinsDirector of Client Services
20+ years helping large employers improve HR processes
© 2016 Bright Horizons Family Solutions, LLC
We are experts in designing, managing, and measuring education assistance programs, including:
About EdAssist
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Tuition reimbursement Certificates and non-degrees
Student loan repayment Dependent scholarships
Help 150k working adultsGain new skills through education
Each year, we:
Administer $500mIn education payments
Manage 200+School partnerships and discounts
Forces Driving the Trend
Difficulties Finding Talent
• Recruiting costs outpace inflation1
• Only 1.5 workers per open job2
• Wage growth at its highest pace in 6+ years3
Increasing Degree
Requirements• Two-thirds of
positions require post-secondary degrees4
Skyrocketing Tuition Costs
• College costs have risen 1200%since 19785
• 70% of new graduates have student loan debt6
1) Bersin by Deloitte; 2) BLS June 2016; 3) Boomberg.com; 4) Georgetown University; 5) Bloomberg.com; 6) US News & World Report
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Of adults with student loans:– Two-thirds (64%) say it is the
debt they most want to eliminate. – Three-quarters (78%) say it has
limited their ability to save for retirement.
– 85% want to continue their education, yet half say their current debt is holding them back.
Why Debt is in the Spotlight
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Source: Kelton Global
Charting the Rise of Student Loan Assistance
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Tuition Assistance
Charting the Rise of Student Loan Assistance
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Pre-2015
Feb 2015
Sept 2015
Q1 2016
Memorial Hermann program
announced
PWC program announced
15+ publicly announced programs
Loan repayment limited to select
industries (e.g. law)
A Complement to Tuition Assistance
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Tuition Assistance
Employees continuing their education
Thousands of active policies to benchmark against
Borne from tax law. Evolved into a strategic program.
Student Loan Assistance
Employees who earned degrees AND employees continuing education
Employers are pioneering the models
Borne from tight labor market.Strategic from day one.
Audience
Best Practice
Intent
What’s driving your interest in student loan assistance? (select all that apply)
a) Keeping up with industry trendsb) Mandate from leadershipc) Requests from employeesd) Looking for ways to retain talent or skillse) Looking for ways to boost recruitingf) Other
Poll #1
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Think in terms of three talent outcomes:
Start with a Goal in Mind
Attracting Talent
Improving Engagement
Enhancing Retention
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Define Your Audience
A specific group (e.g. Job function, HiPo)
All employees(eligibility rules apply)
Recent grads
FeatureEmployee
AppealProgram Impact
Why?
Calculators and decision tools
Low LowA growing number of consumer sites offer free loan payment calculators with rich features
Discounted refinancing rates
Moderate LowRefinancing is not available to everyone...Even when it is, financial impact can be modest
Personalizedrepayment guidance
Moderate HighNo two situations are alike, and the best choice changes along with an employee’s financial picture (income, other debt, aspirations)
Payments towardsdebt principal
High HighAccelerates debt repayment, differentiates total rewards, and provides a lasting reason to stay with your business
Decide on Your Scope of Services
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http://www.marketplace.org/2016/07/21/business/amazon-and-wells-team-offer-student-loans
Employers report difficulty attracting:1
Critical-skill employees (55%)High-potential employees (54%)Top-performing employees (56%)
And they’re paying more for recruits2
66% are increasing starting salariesSigning bonuses are at an all time high (76%)
Signs of a Tight Labor Market
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1. “Under pressure to remain relevant, employers look to modernize the employee value proposition.” Willis Towers Watson, 2016. 2. “Bonus Programs and Practices.” WorldatWork, July 2016.
Loan Assistance for Recruiting
Program directed towards employees who have recently graduated
Employer contribution is a flat amount for a fixed number of years
Benefit eligibility may start as early as day 1.Participants also get free expert guidance.
19 © 2016 Bright Horizons Family Solutions LLC
Example: NVIDIA
20 © 2016 Bright Horizons Family Solutions LLC
http://www.hreonline.com/HRE/view/story.jhtml?id=534361024
Beau Davidson, VP of HR
“ We're recruiting the best and brightest engineers. These students have a lot of opportunities in front of them, and we
see this as a way to differentiate ourselves ”
More than one-third of employers report rising turnover in the past 12 months
Turnover is Rising Globally
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1. “Under pressure to remain relevant, employers look to modernize the employee value proposition.” Willis Towers Watson, 2016.
Increased, 35%
Decreased, 19%
The Same, 46%
How has turnover changed?
Loan Assistance for Retention
Program directed towards employees with recent and longstanding debt
Employer contribution may increase at certain employment milestones
Benefit eligibility may start later (e.g. 1 year). (Advising help may kick in on day 1.)
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Tenure Annual Benefit
2 years or less $600
3 – 4 years $2,400
5 – 6 years $4,800
7 – 9 years $7,200
10 years or more $9,600
Example: Law Firm
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A few numbers tell the story:Average time to fill has risen to 52 daysThe top obstacle to hiring is a shortage of qualified candidates 90% of recruiters say candidates drive the market
Skills in Short Supply
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“Top HR Statistics.” Glassdoor.com, accessed Sept 9, 2016
Loan Assistance for Key Skills
Program prioritized for employees in specific job functions
Employer contribution is larger for employees in specific job function or skills
Benefit eligibility may start later (e.g. 1 year). (Advising help may kick in on day 1.)
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Example: Memorial Hermann
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Ann Hollingsworth, VP of compensation, benefits and HRIS
“We know that to recruit the top graduating clinical students, we need to continue offering compelling benefits to
differentiate us from our peers.”
- Houston Business Journal, February 2016
If you were to launch a loan repayment program next year, where would your top focus be?
a) Young workers / millennialsb) Shoring up retentionc) Acquiring a specific skill set
Poll #2
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Sample success metrics include:Quantitative Outcomes– Increase of applicants / increased mention of the loan benefit– Reduced reliance on signing bonuses– Fewer open positions for specific role(s)– Reduction in turnover– Increase of employee job referrals
Qualitative Outcomes– Rising engagement scores of participants– Improved perception of organizational brand– Positive employee feedback
Establish Metrics Early
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Setting Your Team Up for Success
Design your solution in response to employee needs
Carefully forecast usage. Hire an expert if needed.
Incorporate loan repayment into your benefits strategy
© 2016 Bright Horizons Family Solutions, LLC32
Disclaimers
*This webinar is designed to provide accurate and authoritative information about the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. *This webinar provides general information only and does not constitute legal advice. No attorney-client relationship has been created. If legal advice or other expert assistance is required, the services of a competent professional should be sought. We recommend that you consult with qualified local counsel familiar with your specific situation before taking any action.