Some companies have started programs to help their younger employees pay off their student loans. The hotel industry, with its enormous amount of open positions, should consider this approach to improve their employee attraction and retention.
The balance has shifted a bit. During the recession, job candidates had to do whatever they could to stand out in order to even just be in the running for a position, let alone actually get the job. Now the opposite is true.
The U.S. Bureau of Labor Statistics is reporting there are roughly 1 million open positions in the hospitality and leisure sector. Employers in the hotel industry are trying to figure out the best ways to attract and retain the best talent by offering better wages and benefits.
I recently read about one approach some U.S. employers are taking to make themselves stand out among others with job openings: student loan assistance. NPR reported that a smaller percentage of U.S. employers are offering to pay off as much as $10,000 of employees’ student loans over a period of five years as long as the employees stay with the company for a certain number of years.
I reached out to a number of hotel companies that operate in the U.S. to see if anyone is offering such a program. My search was nowhere near exhaustive, but I feel the results would have been relatively the same even if I had reached out to everyone. No one I reached out to has such a program in place. To be fair, some thought it was an interesting area worth exploring, but no actual existing programs.
This could be a huge opportunity for employers looking to sweeten the deal for young, new employees. Remember that almost every millennial heard from their parents and teachers that if they wanted to make it in this world, they would need to get a college education.
College is expensive, much more so than when the parents of millennials (and even Gen Xers) were of college age. Forbes reported last year that the average cost for all four-year colleges and universities came to more than $26,000 a year, which adds up to more than $100,000 for all four years. Adjusting for inflation, the cost of a year of higher education at a comparable four-year school in just 1989 was about $26,120—for all four years combined. Even college textbooks are more expensive. This article from 2015 (almost four years ago) reports that the cost of college text books rose more than 1,000% since 1977.
Good luck finding a part-time job during the school year and over breaks to pay off college nowadays like older generations could do. They don’t exist. The jobs exist, obviously, but not at the level of pay that would actually help with the debt. The same Forbes article reported that the cost of higher education increased eight times the amount wages have increased since 1989.
The skyrocketing cost of higher education is why there’s so much student debt in this country. Scholarships, grants and other non-loan financial aid only go so far, and as stated earlier, a part-time job isn’t going to cover it. According to the NPR article, Americas have more than $1.5 trillion in student loan debt. The size of the average loan has almost doubled in the past 10 years.
Aiding employees with their student loans isn’t a perfect plan. The money paid out in assistance is taxable to both the employer and employee. If an employee turns out to not be a great fit for the company, they might feel stuck in order to maintain the assistance and not have to pay back their employer if there’s a clause about repayment if they leave too soon.
But it’s something. Not every program would necessarily have to be the same. There should be enough flexibility for any company to explore this idea and tailor it to best meet the needs of the company and the employees. Student debt is huge, especially for the generation hit hardest by the recession in terms of wage growth.
Give this idea some serious thought. The example in the NPR story of $10,000 over five years works out to $2,000 a year for each employee in the program. Sure, that $2,000 a year for every employee that signs up can certainly add up, but think of it as an investment. Besides, how much are you losing through poorer service due to open positions and turnover? It’s worth a deeper look.
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