US Women May Have Most to Gain from Student Debt Assistance

US Women May Have Most to Gain from Student Debt Assistance

A recent analysis by the American Association of University Women found that a sizable majority of all student debt in the US is owed by women—$890 billion out of $1.4 trillion—while individual women with bachelor’s degrees graduate with an average debt $2,700 greater than that of their male classmates:

The newly-released data from the 2015-16 National Postsecondary Student Aid Study also reveal that:

  • Women comprise 56 percent of enrolled college students, but hold 65 percent of outstanding student loan debt;
  • 71 percent of women have student loan debt at bachelor’s graduation compared to 66 percent of men; and
  • Black women graduate with the most debt – at $30,400 – compared to $22,000 for white women and $19,500 for white men. …

The analysis shows how the burdens become compounded by other financial factors – where women take two years longer than men to repay their student loans, in part because of the gender pay gap. Women with college degrees who work full time make, on average, 26 percent less than their male peers, which leaves women with less income to devote to debt repayment. Compared to white men with bachelor’s degrees, black and Hispanic women with bachelor’s degrees make 37 percent and 34 percent less (respectively) and struggle to repay their loans as a result.

The Millennial generation is already known to be struggling with an unprecedented burden of student debt, driven by the rising cost of college, the financial impact of the Great Recession, and other factors. The AAUW analysis adds a new dimension to this problem by illustrating how acutely it affects women (particularly women of color), in combination with the other factors that contribute to their disproportionate levels of financial insecurity.

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Abbott Uses 401(k) Matching as Incentive for Student Loan Payments

Abbott Uses 401(k) Matching as Incentive for Student Loan Payments

The pharmaceutical and health care products company Abbott Laboratories rolled out a new benefit last week that is designed to encourage employees to pay down their student debt by helping them save for retirement at the same time. The New York Times’ Ann Carrns noted Abbott’s new benefit in an item discussing the broader trend of student loan assistance benefits:

Under the new Freedom 2 Save program, employees who contribute at least 2 percent of their pay toward their student loans — as verified periodically by an outside contractor — will receive a 5 percent match in their 401(k) retirement savings plan. Abbott offers the same match to employees who contribute at least 2 percent of their pay to their 401(k). So, for instance, if an employee is making $70,000 and uses at least $1,400 to pay down student debt, Abbott will contribute $3,500 to the employee’s 401(k) plan, a spokeswoman said.

That benefit can add up over time. Abbott offered this illustration of the program’s impact: [An employee] who joins Abbott with a salary of $70,000 could accumulate $54,000 in their 401(k) account over 10 years, assuming a 6 percent average annual return and yearly merit increases of 3 percent, without any retirement contribution of their own.

Assistance with student loan repayment remains an uncommon benefit among US employers: Our research at CEB, now Gartner, shows that among organizations that offer education benefits, 90 percent provide tuition assistance, but only 7 percent provide student loan reimbursement. SHRM’s 2018 Employee Benefits Survey found that just 4 percent of all organizations offer student debt benefits, compared to 51 percent who offered assistance with undergraduate education. Eleven percent offer a payroll deduction for contributions to tax-advantaged 529 college savings plans, but fewer than 2 percent offer matching contributions to those plans.

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Some Tech Companies See Value in Benefits Equality for Contractors

Some Tech Companies See Value in Benefits Equality for Contractors

The online polling company SurveyMonkey made headlines earlier this year when it revealed that it had begun offering “gold standard” medical, dental, and vision benefits, identical to those of its regular full-time employees, to its independent contractor workforce in January. The company was inspired to do so by its employees, many of whom pointed out in a benefits survey that while their benefits were excellent, they thought it unfair that they were unavailable to the company’s janitorial and catering staff.

Last week, Fast Company’s Eillie Anzilotti took a closer look at SurveyMonkey’s decision to equalize benefits, considering the change in the context of growing awareness of the impact this form of inequality has on the army of contractors who manage facilities for Silicon Valley tech companies and many other white-collar firms in the US. SurveyMonkey is committed to making benefits equality work, primarily as a statement of its values, Chief People Officer Becky Cantieri told Fast Company:

“We have expectations for ourselves that we use our platform to contribute positively to the industry,” Cantieri says. The prevailing independent contractor model in Silicon Valley leads to “two groups working literally side by side, who have a very similar impact on the day to day experience of working at the company, but are treated very differently,” she adds. It’s still an unusual arrangement in the tech world, so SurveyMonkey has been slow to scale it to its other offices outside of San Mateo, as they want to ensure they’ve ironed out the kinks, but they intend to do so going forward: This open enrollment season, they will bring expanded benefits to contract workers at the Portland office.

She also checks in with Managed by Q, a platform for part-time janitorial, maintenance, and clerical workers, whose founder Dan Teran decided in 2014 to classify workers on the platform as employees, not contractors, and offer them benefits including health insurance, paid leave, a 401(k) plan, and even equity. “Even though it may seem like a higher cost up front, we believed that the overall value of doing so would be higher than us just saying it’s not worth investing in our employees,” Maria Dunn, Managed by Q’s director of people, tells Anzilotti. The extra costs imposed by Teran’s decision isn’t hobbling the startup’s growth: Managed by Q has raised over $76 million so far and is turning a profit. It recently announced that it was acquiring the office space planning and project management service NVS, broadening its portfolio of services and potentially gaining new clients.

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Chick-fil-A Announces $14.5M in Scholarships for Employees

Chick-fil-A Announces $14.5M in Scholarships for Employees

The American fast food chain Chick-fil-A recently announced that it was awarding $14.5 million in scholarships to over 5,700 of its employees across the country this year:

The investment in this year’s program marks a $5.7 million increase since 2017 and is the one of the highest unrestricted per-employee scholarship investments in the industry. Team Members who are beginning or continuing their higher education will be awarded scholarships in the amount of $2,500 or $25,000.

Chick-fil-A’s “Remarkable Futures” education initiative allows students employed by the company’s local franchise Operators to receive up to $25,000 in scholarships that can be applied for any area of study at any accredited institution of their choice, including any two- or four-year colleges and universities, online programs or technical/vocational schools. There is no requirement of hours worked or length of service to qualify. In addition to $14.5 million in scholarships, all of Chick-fil-A’s 120,000 Team Members also have access to tuition discounts and other educational benefits at 100 colleges and universities nationwide.

Chick-fil-A, which has been awarding college scholarships since the 1970s, has provided more than $60.5 million in education funding for nearly 46,700 employees over the years. The company launched the Remarkable Futures program in 2016 to expand this initiative considerably, more than doubling the amount of funding it would provide for employees’ educations.

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Is Benefits Equality the New Frontier in HR as PR?

Is Benefits Equality the New Frontier in HR as PR?

Over the past two years, we’ve seen a growing number of organizations leverage their HR strategies as a means of enhancing their employer and consumer brands simultaneously. The idea behind this “HR-as-PR” strategy is to make the organization more attractive to candidates—a growing concern in a tight labor market—while also cultivating a reputation among increasingly values-focused millennial customers as a progressive or socially conscious company.

Viewed through this lens, Rent the Runway CEO and co-founder Jennifer Y. Hyman’s recent op-ed at the New York Times illustrates the emergence of a new theme in HR as PR: ensuring that different classes of employees enjoy equal access to benefits like parental leave:

Like so many companies before us, my company, Rent the Runway, had two tiers of workers. Our salaried employees — who typically came from relatively privileged, educated backgrounds — were given generous parental leave, paid sick leave and the flexibility to work from home, or even abroad. Our hourly employees, working in Rent the Runway’s warehouse, on the customer service team and in our retail stores, had to face life events like caring for a newborn, grieving after the death of a family member or taking care of a critically ill loved one without this same level of benefits.

I had inadvertently created classes of employees — and by doing so, had done my part to contribute to America’s inequality problem. …

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Qualtrics’ Experience Benefit Illustrates the Power of Innovative Rewards

Qualtrics’ Experience Benefit Illustrates the Power of Innovative Rewards

Qualtrics, a customer and employee experience management company based in Provo, Utah, introduced a new bonus scheme in January that focuses on its own employees’ experiences. The new perk, which replaced the company’s $1,000 Christmas bonus, offers employees $1,500 expressly to fund meaningful experiences for themselves and their families. SHRM’s Kathy Gurchiek takes an extensive look at this “experience bonus” and how Qualtrics employees are using it:

At Qualtrics, a full-time employee who has worked at least one year at any of its 14 offices—regardless of one’s job performance rating or review—may submit a form outlining the experience he or she has planned. Qualtrics deposits the money into the employee’s account for that purpose.

“We’re not going to judge and say ‘you should do this or that.’ … We want you to do what’s meaningful for you, and we want to empower you to do something [special],” said [Mike Maughan, head of global insights at Qualtrics], who used his bonus to visit his parents who had moved to Melbourne, Australia. Unused bonus money does not accumulate, as the company wants to encourage employees to savor life.

Qualtrics employees, 80 percent of whom are millennials, have used their bonuses in a variety of ways: diving with sharks, hiking the Great Wall of China, seeing Hamilton from the third row, or launching a charity to raise money for an orphanage in Kenya. The original idea behind the benefit, Maugham said, was to exemplify the company’s culture of wanting the best for its employees, but it has also paid off as a recruiting and retention tool.

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PwC’s Return Policy for New Parents Is a Natural Experiment in Shorter Workdays

PwC’s Return Policy for New Parents Is a Natural Experiment in Shorter Workdays

Last month, PwC rolled out a $45 million investment in its employee wellness program, including a suite of new benefits for working parents, Glassdoor’s Amy Elisa Jackson reported at the time:

  • $1000 bonus to all staff to spend on wellness-related activities;
  • Four weeks of “Paid Family Care Leave” for all partners and staff to care for certain family member with serious health conditions;
  • Eight weeks of paid parental leave for staff of any gender with a new child (currently six);
  • New “Phased Return to Work” transition, with the option of new parents working 60% of hours, at full-time pay, for an additional four weeks following a block of paid parental leave;
  • $25K reimbursement, per child, for adoption (currently $5K);
  • $25K reimbursement, per child, for surrogacy (traditional and gestational) expenses;
  • Pro bono membership to sittercity.com (childcare, housekeeping, pet care services);
  • Six hours of free Eldercare consultation (home assessments, implementation of care, etc.)

These expanded benefits, which according to Amanda Eisenberg at Employee Benefit News will go into effect on July 1, mirror what many other large US employers are doing to make their family benefits more generous and more inclusive. The point of interest here is PwC’s Phased Return to Work program, which the professional services firm says is the first of its kind. Offering this benefit up-front and actively marketing it to employees avoids the trap wherein new parents are afraid to ask for the flexibility they need out of fear of being seen as uncommitted. Closing that loophole was the motivation for Adobe’s returning employee flexibility program, which allows employees returning from at least three months of leave to work a non-traditional schedule for at least four months and requires all returnees to meet with their manager and HR to discuss this option.

Paying employees a full-time salary to work only part-time may sound absurd on its face, but we’ve seen a few other organizations experiment with shorter workdays in recent years. PwC’s policy will be worth watching, as it will provide another data point in how a limited workweek affects employee productivity, particularly among the highly stressed cohort of new parents.

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