NEW YORK — Ask Corporate Synergies benefit consultant Nicholas Park what voluntary benefit clients are most interested in and he has a rapid response.
Student loan repayment programs top the list as the most requested benefit addition for employers, Park said, speaking Tuesday at Spark HR, an HR and finance forum in New York. That’s due to employers’ increasing focus on helping their employees improve their financial well-being.
There is a fear that the nearly $1.5 trillion in student debt will have long-term implications for workers and their employers, he added.
“It’s a balloon,” Park said. “It’s almost like the housing market in 2007; there’s an underlying implication that this could potentially blow up.”
A number of student loan benefit providers have emerged over the past few years to help tackle the problem, Park said. Many provide high-tech platforms, direct student loan repayment through payroll deductions and a new IRS allowable match swap. Tuition.io, Commonbond, Gradible, Peanut Butter and Vault are just a few of the vendors that provide repayment benefits, he said.
“It’s something hiring managers are noticing is a stress factor [for employees],” Park said. “How do you help them help themselves?”
More employers are interested in student loan benefits but they may not be sold just yet. Just 4% of companies offered the benefit in 2018 — a percentage that has remained about the same since 2016, according to data from the Society for Human Resource Management.
Some of this hesitancy comes from concerns over finances, says Peter DeBellis, total rewards research leader at Deloitte. “A program like this is a personal decision for an organization. It depends on your demographics, how your employees are feeling, what your industry is, what your financial well-being profile is,” he said last month during the the WorldatWork Total Rewards Conference. “It’s not something to do lightly. It can have some serious financial ramifications, so it’s something to step in thoughtfully if you are thinking about going down this road.”
Regardless, employers including Hulu, Staples, Travelers Insurance, marketing agency Finger paint and Sotheby’s all offer student loan repayment programs. PwC, one of the first employers to add the benefit in 2016, has paid nearly $26 million toward worker debt since the start of its program.
But student loan benefits aren’t the only offering companies should invest in, Park said. Other voluntary benefits employers should consider include individual long-term care, executive reimbursement plans, executive individual disability insurance, telemedicine and pet insurance.
“The voluntary category is evolving at a rapid pace,” he said. “I do see an evolution toward a total rewards program.”
While voluntary benefits can be attractive offerings for companies, Park warned that if employers don’t have an implementation plan, the benefits may fall flat. Employers should avoid a “set it and forget it” mentality, he added.
“If you fail to plan you plan to fail,” Park said. “There is strategy involved, it’s not something you can just hang up on a Christmas tree as an ornament. [You’ve] got to have a coordinated effort.”