An employee benefit Insurance industry can’t afford to miss:
The insurance industry is plagued with a talent gap…
Attracting top young talent is an existential crisis of the industry, partly of our own doing. Managing the image of the industry, has never been a major focus – talent or recruiting was nepotism focused as well as recessionary driven. Post recession was a great time for the industry to get top talent who was leaning towards traditional finance or banking, but due to the volatility chose Insurance.
But now the time has come for change…
Insurance Industry dilemma
According to McKinsey study, there are too few millennial and younger generation workers to fill the need from the insurance industry. I commented prior about how the talent gap might be closed by technology over time, but in the short term – the need to attract young talent is real and for some companies can be a real crisis.
Those who offer this benefit will have a huge advantage over their competition when it comes to talent and recruitment.
Scale of Student Debt
College debt has skyrocketed over the past 10 years, and there is no end in sight. Average student debt is around 28,000-29,000 as of 2015, and risen to 30,100 as of reports in 2017. If you see either of the videos you will realize the impact this has on our young people and our economy.
Many of these young employees cannot get out from the weight of their student debt and consumer debt. They will not be able to buy homes, cars, etc.
Forgoing the American Dream, or at least delaying it.
Benefits to employers
The companies that offer this additional benefit will see it in the quality of their young talent. Whether it be contributing $100 a month towards an employee’s student debt or more, these early adopters will get some of the best talent. Right now this is a rather unique employee benefit – providing student loan contributions, refinancing, and education – and also offering an easy and comprehensive way to build financial wellness at your company.
These offerings help empower your employees to manage their student debt, regardless of their credit or income.
Also, it is a great retention tool, so you don’t have employees hopping from competitor to competitor. By contributing to your employees’ student loans through one of the new providers, you can customize who is eligible, select your contribution, there are low or no fees to start (depending on service), and it is easy for employees to enroll.
Insurance industry employers better wake up, this is a great retention tool and benefit that you can’t afford to miss. I recognize expense ratios are highly scrutinized, investment income is low and industry results could be better, but have you seen the impact of talent swapping from competitor to competitor, it is probably costing your organization more than $1000 per employee in direct costs and more than that in productivity as you have to train people for 2-3 months.
It is sometimes difficult to put yourself in another’s shoes, but think about the position young adults are in getting out of college and the stress they must have, this will be your opportunity to shine as an employer and could make the difference between getting your top candidate or losing out.
For those of you with the student debt and your employer doesn’t offer assistance, please check out this article from Wisebread about 17 companies that will help your repay your student loan.
Time to get your American dream…