The Solution to Millennial Employment Turnover

August 1, 2018

The Millennial Generation or those born from 1981 – 1996ⁱ seem to be the biggest target for social commentary. Millennials have been blamed for the decrease in napkin sales, the increase in renting versus buying, and have numerous stereotypes like the generation without social skills. If it isn’t clear, Millennials have certainly become the generation every other group loves to hate.

If the lack of social skills weren’t enough, here is another reason people are finding it hard to approve of the millennial generation – the lack of loyalty to employers. Currently, 60% of millennials are open to a different job.ⁱ The loyalty that previous generations had to their employer is lost among the Millennial Generation. There doesn’t seem to be any lost and found box where companies can go to find that lost loyalty, either. Could it be the lack of raises or is it something missing from your human resource offerings?

The average college graduate leaves school with $37,172 in student loan debtⁱⁱ. That college debt is more than any previous generation. When your workers are carrying more debt, they are more conscious of what they are getting paid. Student loan debt can be like a fire for some borrowers, as they need to eliminate the debt as soon as possible before incurring additional damage.

Allow us to put this employee need in perspective for you. Three in five young workers say a higher priority for them is paying off their student loans, not retirementⁱⁱⁱ. What a compelling insight into what young workers are focused on. This provides a perfect illustration of why your traditional Human Resource benefits like a 401K may no longer be enough to keep a young workforce motivated.

Before we continue, let’s clear something up, the problem of student loan debt doesn’t only affect younger workers. Though younger Millennial workers are highly affected, one in five adults, ages 30 to 44, have student loan debt according to PEW research^iv. So what can you do as an employer to address the concern of student loan debt and keep your employee motivated?

We would recommend adding student loan education and assistance to your suite of HR benefits. It’s a no-brainer to add an HR benefit that doesn’t cost your company anything. Yes, you, as an employer would pay nothing to offer this to your employees. Education Loan Finance offers a program where a link can be placed directly into your HR portal. It’s almost effortless to partner with a company and offer this benefit!

Want to blow your employees out of the water? Consider offering to contribute to your employee’s loans. You’ll never have problems with employees leaving, at least while they have student loan debt anyways. There are multiple different methods available to offer student loan contribution to your employees. You could offer a type of sign on bonus payment to be applied directly to the principal of the loan. These types of bonuses are great for the holiday season, sign-on bonuses, or reward for a job well-done. A second popular method of contribution is a monthly payment. Below is a chart we’ve put together to illustrate how employer contributions can have a huge impact on student loan debt. Take a look for yourself and see how an employee with student loan debt could be easily motivated based on this simple and free HR benefit.

Total Employee Loan Debt	Loan Lifetime	Interest Rate	Annual Employer Bonus	Total Employee Savings
$37,000	10 years	6%	$1,000	$10,269
$200,000	7 years	6%	$1,000	$5,843
$200,000	10 years	6%	$1,000	$11,102

If you aren’t sure if student loan repayment assistance is right for your company that’s okay, but keep that in mind any time you receive a two-week notice from an employee. There are multiple plans available to help your employees navigate their way through student loan debt repayment.

Common offerings an employee can gain by working with a company may include employer contributions, student loan refinancing, and educational tools. So how does an employer add this to their employee offerings? It’s simple, by partnering with student loan refinance companies like Education Loan Refinance; you have the opportunity to make student loan debt assistance benefits a reality for your employees. Now, there is no guarantee that offering benefits to employees will keep them from leaving. Aside from benefits, there are billions of reasons people leave jobs. For younger generations like the always loved Millennials taking on more and more debt each year, this is a MUST. To be considered groundbreaking and modern, your company will need to be offering student debt assistance.

Learn How ELFI for Business Can Help You

ⁱ http://www.elfi.com/elfiforbusiness/
ⁱⁱ http://news.gallup.com/businessjournal/191459/millennials-job-hopping-generation.aspx
ⁱⁱⁱ https://www.creditdonkey.com/average-student-loan-payment.html
^iv https://d9jmqzwnxk1s1.cloudfront.net/wp-content/uploads/2018/08/14141823/asa_young_worker_and_student_debt_survey_report-1.pdf
^v http://www.pewresearch.org/fact-tank/2017/08/24/5-facts-about-student-loans/

Polish Your Company Brand

Today’s job seekers are looking for more than just a good compensation package. They want to be part of a team that emphasizes shared values and a unified purpose. A company and its workforce should have a recognizable brand with clearly communicated values. By clarifying your core values and creating a cohesive mission statement, you define your business philosophy and give new recruits a glimpse into your workplace culture. Make a deeper impression on potential new team members by going a step further: Let high-potential employees experience your company culture firsthand. Consider including activities like these in your recruitment process:

Tour of facilities & on-site amenities
Lunch with staff at the corporate lunchroom
Face-to-face meetings with company or division heads
Informal conversations with valued team members
Off-site mastermind gatherings with new and existing employees

You will reduce turnover costs when you identify new staff members who share your company values and have the potential to fit seamlessly into your corporate culture. Understanding your company’s management style and the characteristics of your most successful employees can prevent potential hiring mistakes. One of the most common reasons cited for an employee leaving a job is a “poor relationship with management.” Your company will succeed at employee retention when you understand and communicate your management style and company culture at the outset— before you have spent the resources to recruit and train the wrong candidate.

Create a Meaningful Compensation Package

A competitive salary is essential to new team members, but other types of compensation may seal the deal. Companies seeking to differentiate themselves from competitors offer compensation packages that are meaningful to their employees. In addition to healthcare benefits, paid time off and 401K fund matches, employees are looking for perks and benefits that enhance their lifestyle. A recent Robert Half survey cited these desirable additions to a company’s compensation package:

Paid parental leave
Opportunities for professional development
Profit-sharing plans
Student loan reimbursement
Dental & vision insurance
On-site amenities like childcare, gym & concierge services
Compressed workweek
Telecommuting
Flexible work schedule
Paid time off for volunteering

Many perks are an expression of your company’s culture, adding purpose and engagement for your high-potential employees. Consider sponsoring a community food drive or park clean-up. Host social events, investment seminars or concerts. You could also incorporate monthly rewards for employees who exceed expectations, such as a $50 meal certificate. This would drive your employees to perform to their highest every month and maintain workplace morale. Today’s recent grads respond to a work environment that meshes with their personal values and interests.

Sell High Potential Employees on Your Company

Once you have identified a talented candidate for hire, make the sale. New recruits who understand how they fit into your company’s culture and structure are more likely to invest themselves and stay. Boost talent retention by defining a path forward within the company. New hires want to know they will have opportunities for professional development, continuing education and the possibility of internal promotion. Show them where they could be short term, such as a year or two in the future. Seeing the growth within arm’s reach will give them the drive to perform the best they can. They are also highly focused on achieving work-life balance. If your business model permits it, offer greater work flexibility with schedules that allow work-from-anywhere options and unstructured time on the job.

Add Student Loan Repayment Benefits

Corporate help with student loan repayment is a big plus for high potential employees and a key business differentiator. ELFI for Business has the expertise to help your HR department put together an attractive hiring package with sought-after benefits like these:

Financial education
Employer contribution match
On-site consultations
Budget-friendly refinancing options

Connect with ELFI for Business right from your HR portal—or call 844.601.ELFI to discuss the positive impact these benefits have on hiring and engaging valuable team members.

Why Are Employees Leaving 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.

2019-07-03

Measuring the Costs of Employee Turnover

Best-selling business management author Jim Collins was asked during a 2001 interview if he had identified a good business response to the economic slowdown that had gripped the nation. His widely quoted answer is as relevant today as it was at the time: “If I were running a company today, I would have one priority above all others: to acquire as many of the best people as I could [because] the single biggest constraint on the success of my organization is the ability to get and to hang on to enough of the right people." Nearly 20 years later and in a highly improved economic climate, Collins’ words still encapsulate the biggest challenge facing HR departments of corporate giants and small start-ups alike: finding and retaining quality team members. In an era of competitive recruitment and job-hopping staff, your company risks losing monetary and human capital each time a valued employee chooses to leave. Employee turnover impacts your bottom line and your company's culture. To set wise employee retention policies, you first need to assess the costs of staff turnover accurately and measure the full impact of employee loss.

Direct Costs of Replacing Employees

A talented employee exiting your company costs you money. Estimates of how much employee turnover costs can vary by industry and employee salary. A study by Employee Benefit News estimates the direct cost to hire and train a replacement employee equal or exceed 33% of a worker’s annual salary ($15,000 for a worker earning a median salary of $45,000). Cost estimates are based on calculatable expenses like these:

HR exit interview & paperwork
Benefit payouts owed to the employee
Job advertising, new candidate screening & interviewing
Employee onboarding costs
On-the-job training & supervision

You can track the expenses of your company’s employee turnover using this online calculator, or create a spreadsheet to determine how actual costs add up to affect your bottom line.

Full Impact of Employee Loss

Josh Bersin, a human resource researcher, writing for LinkedIn, refers to employees as a business’s “appreciating assets.” Good employees grow in value as they learn systems, understand products and integrate into their teams. When one of these valuable employees leaves, the business loses more than just the cost of hiring and training a replacement. Bersin cites these additional factors contributing to the total cost of losing a productive employee:

Lost investment: A company typically spends 10 to 20% of an employee’s salary for training over two to three years.
Lost productivity: A new employee takes one to two years to reach the level of an exiting employee. Supervision by other team members also distracts those supervisors from their work—and lowers the team’s collective productivity.
Lost engagement: Other team members take note of employee turnover, ask “why?” and may disengage.
Less responsive, less effective customer service: New employees are less adept at solving customer problems satisfactorily.

According to Bersin, studies show the total cost of an employee’s loss may range from tens of thousands of dollars to 1.5 to 2 times that employee’s annual salary.

Strategies to Slow Employee Turnover Rates

An effective exit interview helps you and your HR team pinpoint the drivers of your company’s employee turnover. You may find that hiring practices need to be refined or employee engagement should be enhanced. Changes to the break room space, such as fresh fruit or games, will allow your employees to relax and come back to work with fresh eyes and a better attitude. This will keep up the workplace morale, shaping your company culture to include perks appealing to younger workers and will lead to increased job satisfaction. Today’s employees are career-oriented and highly motivated. Keep them on your team with other opportunities such as:

Pathway for advancement within the company
Professional development & advanced education
Flex-time & work-from-anywhere options
Management support & recognition
Lifestyle rewards or amenities like catering & concierge services
Culture of shared values & volunteerism

Add Student Loan Benefits Through ELFI

Student loan repayment tops the financial-worries checklist of many recent graduates. Older team members question their ability to pay for educating their children. New, highly desirable HR benefits like student loan contributions and financial literacy education are emerging from these employee concerns—and ELFI for Business is leading the way for employers to incorporate them into hiring packages. You can connect with ELFI directly from your HR portal and access multiple ways to contribute to employees’ student loan debt. We offer new-hire onboarding booklets, educational newsletters and onsite consultations filled with information for you and your employees. Reach out to us at 1.844.601.ELFI to add cutting-edge benefits to your HR employee package!

Learn More About ELFI for Business

2019-06-28

How Do You Become an Employer of Choice?

Is your company—the company everyone in your industry wants to work for or an “Employer of Choice?” Employers of choice consistently retain their highest performing employees and attract the best and the brightest over their competitors. Employers of choice have little trouble recruiting talent since college graduates line up eagerly to interview for coveted jobs. In today’s competitive labor market, the majority of companies do not qualify as employers of choice. Their workforces are in constant flux, and the cost of employee turnover is hurting the bottom line. Fortunately, that cycle can be halted and reversed. Any business can become an employer of choice by following these five strategies to transform company culture into one that (1) delivers value to employees, and (2) encourages their engagement.

Make Your Workplace a Positive Environment

If your business has been getting by with lackluster performance and frequent turnover, you’ll need a critical eye to evaluate the current culture. Try to hire for longevity and look for the best possible fit for each unique position. Employers of choice search for employees who can make a positive impact on not only their work but their team, too. With capable and involved staff, from new-hires to top management, you can build a workplace recognized for its atmosphere of trust, personal growth, and positive performance. There’s no room for micromanagement in this kind of workplace environment. Entrust your employees with a mission, direction, and goals—then step aside. Allow them to make decisions and respect their choices. In a positive environment, differences of opinion become opportunities for learning and growth.

Provide Relevant Compensation & Benefits

Competitive compensation has always been a hook to catch the attention of potential employees. Even if your business cannot support top-tier pay and benefits, you can shape your compensation package to deliver the value your employees want. Offer the best salary you can afford and supplement it with bonuses and perks that reward company performance. Recognize that today’s employees place a high value on their time—and offer flexible scheduling and remote work options. Consider turning the standard break room into a comfortable lounge where workers can relax, play games or socialize. Go beyond the traditional benefits by adding college loan contributions, paid time off for family emergencies and parental leave to your benefits package.

Encourage Professional Growth

Engaged employees have a keen interest in professional growth and career development. Employers of choice encourage this interest by supporting their team with relevant training and additional growth opportunities, including:

Professional development seminars
On-the-job continuing education
Exposure to new tasks through job rotation
Tuition reimbursement for certifications & advanced degrees
Pathways for advancement

Establish Transparency

People like to know where they stand in a relationship, job, or career. Professionals who feel uncertain about their place in the organization, workplace expectations, or their own performance may seek other opportunities with another company. Transparent communication and clearly defined expectations give your team the perspective they need to stop worrying and start investing in the job. Employers of choice also develop channels for mentoring, giving helpful feedback and praise, and rewarding performance and risk-taking. They provide opportunities for teams to voice their ideas and concerns. Feeling safe and appreciated, employees buy-in to the company culture and become engaged.

Create a Collaborative Culture

If your company is to become an employer of choice, you must develop a respectful and collaborative community. Engaged employees appreciate corporate responsibility, and they have expectations of your business that go beyond products, services, and profits. Workers want to feel their companies are good local and global citizens. Employers who embrace charitable outreach are rewarded with employees who are more confident, purposeful, and willing to work as a team. You can boost staff morale and develop a meaningful and relevant work community by sponsoring activities that include:

Food & clothing drives
National fundraisers
Community clean-up initiatives
Health & wellness fairs
Recycling events
Health awareness campaigns

Become an Employer of Choice With ELFI for Business

Today, a college degree is more accessible than ever—and more expensive. An employer contribution to student loan repayment is one of the best ways to attract loyal employees. ELFI has created a cutting-edge benefits program that is easy to access through your HR portal and includes multiple incentives for attracting and keeping top talent. Take the first step to becoming an employer of choice.

See Why Employees Leave

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.