Today’s tight labor market and frequent employee turnover are challenging U.S. employers to view company cultures with a critical eye. A report
by the Work Institute found that some 42 million (one in four) employees would leave their jobs in 2018. What is the cost of replacing so many experienced people in an organization? According to the report, last year’s “employee churn” costs hovered at $600 billion—a figure that could increase to $680 billion by 2020. Of further concern to companies is the growing realization that young team members are most inclined to move on after a relatively short period of employment. In a recent survey
, 59% of respondents felt they should begin looking for a new position after only one to two years on a job. Older employees continuing to work past retirement age or re-entering the workforce are adding stability to many companies, but the turnover trend has serious implications for the long haul. Why are employees leaving and what can employers do to stem the tide? Data gathered by HR organizations
and research firms reveal some interesting trends about motivating and retaining current and future employees.
Top 4 Reasons Employees Leave a Company
The current employee shortage has upended traditional hiring models. Companies are racing to reshape their corporate cultures and embrace the values of a more limited workforce. Although improved pay and benefits packages
continue to be important, these four workplace problems are the leading reasons why employees pick up—and move on.
- Not enough work-life balance. Team members value their time and don’t want employers to waste it. Their enthusiasm and performance will wane if they are weighed down with busy work and meaningless meetings. Younger employees appreciate flexible schedules, the ability to work from home, and a workload that is challenging without spilling over into personal time.
- Poor management. Supervisors who are unable to engage their employees or unwilling to help them grow by providing positive feedback are commonly cited as reasons to leave. Today’s professionals respond to personal interaction and appreciate public shout-outs and ancillary rewards like gift cards, tickets, and free meal vouchers.
- Lack of recognition & career advancement. Employees who excel like to be recognized for their extra effort. They also need to see a clear pathway for furthering their careers. Today’s staff members expect companies to help them grow professionally while providing access to career development and mentorship programs.
- No company engagement. When a company does not have (or cannot properly communicate) its goals and values, employees lack a shared sense of purpose. Businesses fostering a sense of community are better able to inspire, engage, and retain employees.
Create a Satisfying Workplace to Keep Valuable Team Members
In many ways, today’s workforce is looking for the same type of job satisfaction as high performers of past generations. Respect, appreciation for a job well-done, opportunities for advancement, challenging work, and monetary rewards still lead to employee satisfaction and engagement
. According to Gallup research
, 34% of employees are engaged at work, but 53% are not engaged and likely to leave a job for another offer. To involve these employees and access their potential, employers are putting greater emphasis on corporate culture assets like these:
- Relevant workplaces with a clear mission & shared values
- New-hires who contribute to the corporate community
- Greater creative freedom & autonomy for staff when possible
- Updated technology to support performance
- Employee input as valuable business partners
Student Loan Benefits Appeal to Workers of All Ages
Many young employees begin their careers with a heavy burden of student loan debt. They worry about the monthly toll payments will take on their starting salary. Will they have enough money to travel, buy a home, or start a family? Worries about student debt repayment
are not limited to the youngest workers. Some data suggest that these concerns cut across age groups and include professionals over age 55. Older workers may have taken on student loan debt to fund advanced degrees or send a child to college
. Widespread student loan debt suggests that companies offering repayment contributions and other related benefits have a distinct advantage in attracting and engaging their workforce.
Improve Retention With Cutting Edge HR Benefits From ELFI
As an ELFI business partner, you can add value
to your benefits package with monthly contributions to student loan debt. You’ll also plug into resources like newsletters, webinars and onsite consultations. Connect
with ELFI from your HR portal and discover how significant student loan benefits are to your team members—and how cost-effective they are for your company.
NOTICE: Third Party Web Sites
Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the web sites that have links here. The portal and news features are being provided by an outside source – The bank is not responsible for the content. Please contact us with any concerns or comments.
When you start your post-college career, you may be tempted to breathe a sigh of relief. Before you do that, you have important decisions to make. You’ll have to stretch your paycheck to cover your new lifestyle and associated expenses: a furnished home or apartment, vehicle, insurance, and hopefully a 401K contribution
. If you are like 70% of college graduates, you also have student loans that need to be repaid.
In most situations, it's going to be most beneficial to pay off your loans as quickly as possible so that you are paying less towards interest. The average college graduate's starting salary
, however often cannot allow for enough additional income to cover more than the regularly scheduled student loan payments. Most student loans have a six-month grace period so you can do some budgeting and planning first - if you need to. We don't suggest using the grace period unless you find it necessary to organize your finances. During a deferment
such as a grace period, the interest could still be accruing depending on the type of loan that you have.
If you determine that you may be better off establishing sound financial footing and a workable monthly budget before you begin repaying those daunting loans. Keep these tips in mind as you formulate a strategy for debt payoff.
Student Loans Have Advantages
Varying types of debt are governed by different laws and regulations. Banks often base interest rates for consumer credit loans on your established credit rating. Interest rates for auto loans or credit card debt
tend to be higher than a mortgage or student loan interest. As you review your debt load and make a plan, remember: student loan debt comes with a few "advantages" that other types of debt don’t offer.
- Preferential tax treatment: With a new job, you will be paying taxes on your income. Student loan interest is deductible up to $2,500 and can be deducted from pre-tax income.
- Lower interest rates & perks: Federal student loans have lower interest rates and are sometimes subsidized by the government.
- Lender incentives: Private student loans may come with incentives from the lender that make them a better deal than other credit types. These include fee waivers, lower interest rates, and deferment options.
- Flexible payment plans: Options for lower payments and longer terms are available for both federal and private student debt.
- Build your credit score: You can build your credit score with student loan debt. Now, depending on whether you’re making on-time payments or not, you could negatively or positively affect your credit. If you chose to make small payments during deferments, or a grace period, and regular on-time payments you will be more likely to establish a favorable credit record and reduce the amount of interest you pay overall.
Programs to Help You With Student Loan Payments
There are few options for loan forgiveness with regular debt, but student loans offer opportunities to reduce or eliminate your debt. These may come with commitments and tax implications, so be sure you fully understand them if you decide to take advantage of these programs.
- Loan forgiveness: Federal student loans may be forgiven, but you'll want to be sure that you're following all of the requirements needed of the program. Be sure before choosing this option that the federal loans you have qualify for the program. Also, keep in mind there could be taxes due on the amount that is forgiven. Some student loan forgiveness programs include PAYE (Pay as You Earn) and REPAYE (Revised Pay as You Earn), Public Service Loan Forgiveness, and Teacher Loan Forgiveness.
- Loan Consolidation: Multiple student loans can be consolidated into one payment with the interest rate determined by a weighted average of your current loans - interest rates. Combining multiple loans may be easier to manage on a modest starting salary. Consolidating federal loans usually doesn’t require a good credit score, either.
- Refinance, and you could achieve a lower interest rate: Lenders like Education Loan Finance specialize in student loan refinancing, and have options like variable interest rates and flexible terms. Refinancing your debt could make student loan debt easier to manage than other types of credit.
Pay Off High-Interest Debt First
Before you decide to pay off your student loans, think about the financial obligations you’ll be taking on. Instead of carrying a credit card balance or making low payments for an auto loan, it makes sense to continue your low student loan payments and pay off more expensive debt first or debt with a higher interest rate
. In the long run, you’ll save money and build your credit score.
If you still have doubts about not paying off student debt first, consult a professional financial advisor for help prioritizing your goals and setting up a budget that lets you achieve them.
The most recent data from the Digest of Education Statistics
show that over 54% of those completing graduate studies take on student loans
, and the average loan amount for grad school is over $70,000. With so much at stake, isn’t it worth a serious analysis of the value?
Develop a Decision Matrix to Help You Decide
A decision matrix
is an analytical tool that helps you compare different factors when making a choice. If you are about to take on more student debt
to continue your education, a personal decision matrix that weighs the following questions can help you clarify your values and decide what makes both personal and
- Why do you want a graduate degree? Motivation is a complex process, and you may not know what is driving you to continue your education. A little self-analysis is in order. Do you think graduate work will elevate your prestige, make you an industry authority, or help you find a more challenging job? Or are you afraid of leaving your college comfort zone and entering the workforce?
- Do the jobs in your field of study match your talents and disposition? Do you thrive in a fast-paced environment or enjoy working with the public? Perhaps a predictable or solitary workplace suits you more. If you’ve never been employed in your chosen field, it might be wise to work for a while after completing your bachelor’s degree. You’ll get a better understanding of employment opportunities and personal satisfaction levels before investing more time and money toward an advanced degree. Working before pursuing a graduate program has two other distinct advantages:
- You can make progress toward paying off undergrad student loans.
- You will have time to solidify your life and career goals.
- Will a graduate degree improve your employment and earning potential? Before committing to graduate school, do your research. Monitor the job market on sites like Indeed, Monster or Study job requirements, salaries, and the number of job openings. Talk to individuals in your field—both those with graduate degrees and those with four-year degrees. Will an advanced degree make enough difference in job availability, career stability, and earning potential to offset the time and money required to obtain it?
- Are there alternatives for enhancing your employment value? Explore professional or specialized certifications that could make you more valuable to an employer. Obtaining certificates is usually less expensive than continuing with graduate studies, and added training indicates to employers that you take the initiative and possess advanced skills.
- How will you pay for your advanced degree? If you already have student loans, adding more debt for graduate school could further delay your ability to achieve many financial milestones: marriage, purchasing a home, traveling, or starting a family. Often, grad school loans come with a higher interest rate and greater accumulated balance than undergraduate loans. You’ll need to determine whether the added earning potential of an advanced degree justifies the payments and payback period. It may also be worthwhile to explore alternatives like part-time studies and employer educational benefits to lessen the student loan burden.
Refinance Student Debt in Three Easy Steps With ELFI
You’ve graduated with a college degree and increased your earning power. Now, get the most for your money by refinancing your student loans with Education Loan Finance.
Our competitive interest rates, personalized service, and nationwide availability give you the power to manage your debt
and achieve your goals. With ELFI, you could be just three steps away
from a brighter future!
NOTICE: Third Party Web Sites
Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – The bank is not responsible for the content. Please contact us with any concerns or comments.