Employers are realizing that putting total control of retirement decisions in the hands of their employees was a bad idea. Older employees are delaying retirement due to underfunding of their retirement portfolios and market volatility. The end results are increased healthcare costs for companies to support an aging employee population and decreased upward mobility for younger employees. Many employers have taken steps to solve the underfunding problem for future generations of retirees through auto-enrollment and auto-escalation in defined contribution plans. However, they have been unable to solve a continually nagging problem. How do they retain their millennial employees?
Human Resources leaders now have a new secret weapon for solving the millennial employee retention issue. The $1.2 trillion of outstanding student debt new hires are facing. According to a recent article publishing in the Wall Street Journal, 70% of seniors took out loans for their education and are carrying an average of over $37,000 in student debt. More and more companies such as Fidelity, PricewaterhouseCoopers, and SunTrust are launching employee debt assistance programs, in response to the record amount of student debt new employees will have accrued by the time they enter the workforce.