designing student loan benefits: three emerging models€¦ · speakers sue krause consultant,...

Designing Student Loan Benefits: Three Emerging

Models Sponsored by

Thursday, September 29

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

© 2016 Bright Horizons Family Solutions LLC4

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

BACKGROUND:

THE EMERGENCE OF STUDENT LOAN ASSISTANCE


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


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


Source: Kelton Global

Charting the Rise of Student Loan Assistance


Tuition Assistance

Charting the Rise of Student Loan Assistance


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


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

PART I:

WHY OFFER THIS BENEFIT?

11

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

© 2016 Bright Horizons Family Solutions, LLC12

Think in terms of three talent outcomes:

Start with a Goal in Mind

Attracting Talent

Improving Engagement

Enhancing Retention


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


http://www.marketplace.org/2016/07/21/business/amazon-and-wells-team-offer-student-loans

PART II:

WHAT IS YOUR MODEL?

16

RECRUITING NEW GRADUATES

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


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 ”

21

IMPROVING RETENTION

More than one-third of employers report rising turnover in the past 12 months

Turnover is Rising Globally


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.)


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


25

RECRUITING/RETAINING KEY SKILLS

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


“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.)


Example: Memorial Hermann


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


PART III:

TAKEAWAYS

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


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


THANK YOU. QUESTIONS?

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.

designing student loan benefits: three emerging models€¦ · speakers sue krause consultant,...

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