Benefits and compensation packages are two of the deciding factors for job seekers when they review potential job offers, but now employers are willing to offer even more to entice and hire qualified healthcare talent.
In the United States, one of the biggest challenges facing the world of employment is the barriers to education. On one hand, it's never been easier to obtain an education because there are so many venues that offer advanced education opportunities, degree and certification programs, and more. On the other hand, even though there is greater access to receive an education, the cost of getting that education has been rising since the 1980s.
The healthcare industry is currently facing one of the worst talent shortages in recent memory, and employers are evaluating ways to combat the deficit in unique ways. One of those unique ways is by offering to pay student loan debt for employees. We're going to highlight why the student debt crisis is something that employers are concerned about, how it affects job seekers, and what employers are doing to aid their employees.
As we mentioned earlier, the cost of attending college and universities has been steadily rising for decades. The average cost-per-year for students looking to attend a four-year university is between $5,400 to $16,610 a year for in-state students, and up to $17,490 to $39,400 per year for out-of-state students. In some cases, the fees are growing year over year at exponential rates — making it harder each year for potential students to consider whether or not they should go to school and advance their education because the affordability becomes an even greater concern each year.
To get a four-year degree, this means a student could potentially pay anywhere from $21,600 to $157,600. This means that after four years, students who have to finance or take out a student loan for their education are faced with the daunting cost of what it would be like to purchase a new car fully financed or have the weight of a mortgage on their shoulders.
The cost of attending school wouldn't be so bad if wages also grew at the same rate. The problem is that since 1989, the average annual growth in wages was only 0.3%. This means that while education rose to above $100,000, wages only grew $5,000 in that same time frame. In other words, as the cost of education rises each year, the gap grows even more and students have fewer options to obtain their education and meet their career goals.
Not only does a rising cost of education make it harder for students to obtain an education without seeking aid, but it also makes it even harder for them to pay it off once they graduate. Even if a job seeker finds a fantastic position, the rising cost means that they will have to pay off the student debt longer than initially anticipated. The reason for this is that when a student goes to school, they don't "lock in their rates" for the next four years. Those rates continue to climb each year. This means that students need to ask for more money each year or increase their aid amount.
Another reason that the student loan debt crisis is concerning is that it's forcing employees to make tough decisions so early on in their career. We're often told that as soon as we get a job, we need to start saving for retirement. With the mounting student loan debt that job seekers and employees are facing, they're forced to make the decision about which is more important: their future retirement or their mounting student loan debt. In addition, employees want to save money for their rainy day fund, or their future family, or vacations.
The student loan debt crisis is a massive concern not only for students but for employers and policymakers as well. In the last several presidential elections, candidates have run on the campaign promises of potentially solving the student loan debt crisis, offering new ways to potentially provide students with student loan debt payment options, or even student loan debt forgiveness.
This is a massive concern for policymakers, as roughly 43 million Americans have their own student loan burden. This adds up to be roughly $1.7 trillion in debt (as of Sept 2021).
Policymakers are deeply concerned by the student loan debt that young adults are facing because it means that money is being funneled from them into one area of their lives when it could be spread elsewhere. For instance, instead of buying new goods and services, job seekers and employees need to pay significant sums of money to interest on their student loan debt.
The next concern for policymakers is that the delinquency rate is substantial for those with student loan debt. Nearly ten to eleven percent of all student loans are delinquent.
It also highlights the challenges of educating the entire population, as other countries increasingly subsidize it and their citizen's level of education rises and outpaces the United States.
Job seekers who don't have an education are often faced with tough career decisions as well. Nearly every position in the professional world requires some form of education. Whether it's a certification, license, or degree — they all cost money. This means if a job seeker has some significant experience in a job they're passionate about and want to take the next step in their career, they need to make a decision on whether or not it's worth it financially. Employers can no longer sit around waiting for potential talent to make the decision, they need the talent to start working in the healthcare industry now.
All this mounting pressure from all sides means that students and job seekers are increasingly facing tough decisions on whether or not they should even attend a college or university. The last thing employers need is for potential future talent to determine that the cost of attending school and getting an advanced education degree is too costly, and to seek a career elsewhere.
As we've highlighted earlier, the healthcare industry is facing a massive talent shortage, and employers are evaluating all potential ways to save money and hire qualified talent. Employers are increasingly becoming concerned with the student loan debt crisis because it's having an effect on their organizations, their employees, and their futures.
Employers can no longer sit by and just hope that their employees are going to navigate their student loan debt on their own. There are far too many unknowns and uncertainties for employers to sit idly by and not care about how the student loan debt crisis will play out.
The first reason that employers are starting to care about the student loan debt issue is that it's affecting the way employers can attract top talent. One of the things that greatly impacts candidate consideration is the background check. For those job seekers or students who are seeking full-time work, a background check might include a credit check. Depending on the position, they might be tasked with thousands of dollars to monitor and maintain. If an employer is concerned about their investments, they might do a credit check to ensure that the candidate is reliable and trustworthy.
For those candidates that have a spotty background or have significant issues in their credit history because of a student loan issue, employers are forced to narrow their pool of potential candidates — even when the candidate aced the other parts of the candidate evaluation and selection process. This means that great candidates are getting eliminated throughout the process because of the student loan debt crisis that so many job seekers are dealing with.
The next reason that employers are increasingly concerned about their employees' student loan issues is that it significantly dampens an employee's enthusiasm each day they come to work. Many industries ask that their employees come to work and be enthusiastic throughout the day, but perhaps none require it as much as the healthcare industry. The healthcare industry can wear down employees who aren't enthusiastic about their daily routine or enjoy what they're doing.
It takes special people to be optimistic about a patient's health and encourage them to change their life to living a healthy lifestyle. If an employee is bogged down or concerned about their own future because of the mounting debt that they face when they get off work, that toll will eventually have significant burdens on employee engagement and work ethic.
It can be hard trying to be motivated during work hours when you're constantly feeling like you're drowning in a sea of debt because of the student loan debt you face. Employers who have to deal with less engaged employees mean that the level of care their providing to patients suffers significantly. Patients start to feel like they're not the top priority for each individual healthcare worker. Patients who don't feel valued or important in their desperate time of need will often turn to alternative care options in the future — which means that the facility and organization will suffer potential revenue earnings in the future.
Another major concern for employers in the healthcare industry is that the work required of healthcare workers is often very technical in nature. The last thing that a healthcare employer needs is for an employee to accidentally make a mistake during a critical healthcare procedure because the employee was thinking about their looming student loan debt instead of focusing on the task at hand.
Another reason for concern with the student loan debt issue is overall employee wellness. Like all other employers, the healthcare industry wants to make sure that their employees are doing well and have a healthy lifestyle. Unfortunately, financial stress can have a lasting impact on employee wellness. It might keep employees up late at night as they're stuck thinking on the issue over and over in their head, or perhaps they're trying to work a second job just to put a little more down on their payments.
Those employees who are often worried about something outside of work or face increased anxiety over their debt will often take more sick and vacation days. This means that their productivity is lost and they increasingly become distanced by their own work as they try to seek aid for the toll the stress is taking on them.
Employers also have to pay a significant fee for the company health insurance plan. If an employee is taking more sick days or vacation days as a result of their anxiety and stress associated with their student loan, it means that the employer is having to pay more money than absolutely necessary. In other words, it's cheaper to make sure that your employees are healthy and not taking extra sick days because of the stress they're facing with a student loan debt issue.
The next reason that employers are increasingly growing concerned over the student loan debt issue is that it's making it tougher to retain the top talent within their ranks. Healthcare employers offer some of the best benefits when compared to other industries. This means that employees already have access to fantastic benefits that they wouldn't get anywhere else. Often, the only thing that comes down to the deciding factor for many healthcare employees is the salary they're offered.
As we've highlighted several times, employees are increasingly worried about the money they're making and where it's going at the end of each month. If a competing organization or employer comes along and offers them more money — it means that the employer is offering them more stability and less anxiety at the end of each month. More money means that employees can devote more resources to those rainy days, and retirement funds we highlighted earlier.
For those job seekers and employees who are just starting out their career, increased salary jumps mean plenty of additional opportunities to repay their student loans.
Not to mention, more job seekers are jumping to new opportunities faster than ever. A study by Recruitifi highlighted how roughly 74% of employees are currently looking for a new job, and 69% of those polled said seeking new opportunities is part of their regular routine. Those numbers are staggering, and then when you look at the healthcare industry they're even more alarming, with turnover ratios as high as 85%!
This means that employers increasingly need to focus on offering alternative benefits or compensation packages that entice employees to stay where they are, instead of jumping ship — employers can do this by paying off an employee's student loan debt or offering education assistance in some way.
Now that you understand why employers are concerned by the rising student loan debt and how it might affect their organization, job seekers are also facing plenty of challenges and it's shaping how they conduct their job search and evaluate new positions and career opportunities.
Increasingly, student loan issues are causing job seekers to change how they go about conducting their job search or shaping their career. A study by Earnest showed some interesting results in terms of how a student loan is currently affecting job seekers. The report highlighted 55% of millennial job seekers accepted a job to ensure that they had the income they needed to make student loan payments.
For those job seekers who had student loan debt couldn't find a role in their desired career path or industry, they often turned to other career opportunities or different roles to ensure they had some path to paying down their student loan, according to the study. This means that job seekers are increasingly feeling pressured to just find work instead of finding something that they're truly passionate about or got their education in.
For those job seekers who can afford to wait a little bit longer and don't feel pressed for time to find an income that will help them pay their student loan immediately, job seekers are negotiating more and more when it comes to the job offer stage. In competitive industries, like the healthcare industry, job seekers are keenly aware of how dire the talent shortage is. They know that their technical education and experience goes a long way where talent is needed, and job seekers are increasingly leveraging that knowledge to get more pay and compensation packages that help them out in the long run.
For those occupations in the healthcare industry that are facing a massive talent shortage, job seekers are asking for more salary and compensation when they don't receive benefits packages that help them with education costs or student loan assistance. It's no question as to why additional compensation is important for job seekers because student loan assistance is one of the most sought-after benefits. Job seekers understand that if they're not going to get student loan assistance as a benefit, then they need to leverage additional salary payments in their job offer stage.
Employers are taking notice, and they are trying to help out their employees, job seekers, and students in any way they can by taking a proactive approach in helping solve the student loan debt crisis. With each passing year, more employers are jumping on board in offering education assistance or loan repayment benefits as part of their compensation package to employees.
The healthcare industry is no different, as you can see in our list of the Best Hospitals To Work For, where dozens of the best hospitals are offering education assistance and student loan repayment options to their employees. It doesn't stop there though, more employers are doing all they can to assist job seekers and employees with tools and services to get them on the right track to paying student loan debt efficiently and effectively.
As we've highlighted throughout this article, healthcare employers are listening to the feedback and requests of both job seekers and employees by offering enhanced compensation packages when they cannot offer student loan or education assistance. Offering to pay for a student loan benefit or offering education assistance is a hefty fee that some employers aren't willing to offer for all of their employees. Instead, employers are more open to potentially negotiating additional salary compensation or salary packages because they're on a unique employee basis.
Ultimately it might be cheaper for each individual employer to provide salary raises or compensation bonuses when the experience and education for each employee differ instead of offering everyone the same student loan repayment option or education assistance. Employers are also more willing to offer enhanced compensation packages because they understand that they need to help their employees in some form or fashion instead of sitting idly by while their talent leaves for other organizations that are more willing to assist in any way they can.
Another way that employers are helping to combat the student loan debt issue for their employees, job seekers, and students is by offering free training and educational courses and seminars that individuals can attend. These courses and training seminars are a great way for the healthcare employer to showcase that they care about some of the unique challenges that their employees and job seekers are facing and are doing all they can to assist.
These training courses and educational seminars are largely designed to educate employees about ways to obtain financial freedom, seek financial independence once they officially pay off their student loan debt. In addition, these courses often teach employees about how they can pay off their student loans faster through proper budgeting and management of their funds and investments.
These training courses, educational offerings, and seminars are also a great way to showcase some unique benefits that employees might not be keenly aware of. This helps employers educate their employees with additional reasons to stay, instead of worrying that they will jump ship when a new opportunity comes down the road as we mentioned earlier.
The next way that employers are helping to pay student loan debt is to assist employees, job seekers, and students before they incur the student loan debt. As we've highlighted, the healthcare industry is doing all that it can to meet the challenging demands of the future with the talent shortage, and one of the best ways to combat this challenge is to try and entice more people into the healthcare industry through education assistance.
For instance, it's much cheaper for healthcare employers to promote from within then spend thousands of dollars recruiting new talent and training them for a position. It's easier for a healthcare employer to offer to pay for some education assistance to help an existing employee go back to school and earn an advanced degree when they already understand the workplace culture, team dynamics, and have experience in the actual organization and facility.
Healthcare employers understand clearly that there is a lot to gain by meeting the future challenges of the talent shortage through education assistance to students, job seekers, and existing employees. This is why healthcare employers are attracting thousands of potential employees by offering education assistance to them on the contingency that they sign a contract or agree to repay the assistance in the future if they determine that they no longer want to work for the organization or in a different industry.
Job seekers are definitely interested in any education assistance that an employer might provide because it offers them additional opportunities to advance their career. Healthcare employers see plenty of benefits by providing education assistance. First, they see that there are reduced turnover ratios and training costs as we've highlighted earlier, second employers get additional employees who have training and skills that they need for the ever-evolving healthcare industry.
The healthcare industry is constantly growing and requiring professionals to possess skills and training that is otherwise hard to come by. If an employer helps pay for education assistance for employees, they are going to be gaining a more educated and talented workforce in the long run. This allows them to provide better levels of care and offer more services to potential patients.
Another way in which healthcare employers are helping to pay student loan debt is through full repayment packages. As part of the employee compensation packages and benefits packages, healthcare employers are willing to pay off in full or in chunks. This student loan compensation package is a way to reduce the burden off of potential employees in lump sums.
With the addition of potential policymaker intervention that can help employers pay off employee student loans in even bigger chunks, employers are offering more financial assistance to employees than ever before.
More than ever, employees are doing all they can to potentially attract and hire candidates to meet the healthcare demands of the future. One of the best ways that healthcare employers are doing this is to offer to pay student loans that their employees are facing. Through diverse compensation packages, educational resources, and repayment packages — employers are coming up with unique ways to solve the problems that their employees are facing with the student loan debt issue.