Are American Millennials Rich or Poor? Either Way, They Want Help Getting Out of Debt

Are American Millennials Rich or Poor? Either Way, They Want Help Getting Out of Debt

Millennials now make up the largest age cohort in the US workforce, so employers have an interest in understanding the needs, preferences, and concerns of this generation in order to effectively attract, retain, and develop millennial talent. A common belief about millennials is that their consumption patterns and lifestyle choices are markedly different from those of previous generations: living with their parents longer, getting married later or not at all, and buying homes and automobiles at lower rates. A stereotypical view that has thus emerged of millennials is that they are simply choosing not to do the things their older peers expected them to do in their early careers. The growing consensus among observers of the economic data, however, is that the main reason millennials aren’t behaving like their baby boomer and gen-X predecessors is that they are not as well-off as these generations were at the same point in their lives, thanks in large part to having come into the workforce during and after the Great Recession of 2007-2009.

In the past few weeks, two studies have come out that complicate both of these narratives about millennials, but conflict in how they depict this generation’s financial health. The first is a working paper by Federal Reserve Board economists Christopher Kurz, Geng Li, and Daniel J. Vine, titled “Are Millennials Different?” Yes and no, the economists conclude:

Relative to members of earlier generations, millennials are more racially diverse, more educated, and more likely to have deferred marriage; these comparisons are continuations of longer-run trends in the population. Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth. For debt, millennials hold levels similar to those of Generation X and more than those of the baby boomers. Conditional on their age and other factors, millennials do not appear to have preferences for consumption that differ significantly from those of earlier generations. (Emphasis ours.)

In other words, the paper debunks the idea that millennials are buying fewer houses and new cars because they want to live lower-consumption lifestyles, and instead supports the view that they just haven’t accumulated the wealth to afford these big purchases. On the other hand, economist Alison Schrager argues at Quartz that the Fed data can also be read a different way, and that millennials “are in fine shape, maybe even richer than previous generations, but they have just chosen to invest in different assets”—i.e., higher education:

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Disney Offers Tuition Benefit to Hourly Employees, Becoming Guild’s Latest Big-Company Partner

Disney Offers Tuition Benefit to Hourly Employees, Becoming Guild’s Latest Big-Company Partner

The Walt Disney Company announced this week that it is now offering to pay full tuition for its hourly workers to earn a college degree, complete a high school diploma, or learn a new skill. In a blog post on the company’s website, Jayne Parker, senior executive vice president & chief HR officer, called the “Disney Aspire” initiative “the most comprehensive program of its kind,” adding that it would cover 100 percent of tuition upfront and reimburse employees for application fees and required books and materials. The program covers a wide range of educational endeavors, she noted:

The program is designed for working adults and offers our Cast Members and employees maximum choice and flexibility with their studies, regardless of whether the program and classes they choose are tied to their current role at Disney. Disney Aspire includes a network of schools that offer a wide array of disciplines and diplomas—including college and master’s degrees, high school equivalency, English-language learning, vocational training and more.

More than 80,000 Disney employees are eligible to participate in the program, which the company is implementing in partnership with Guild Education, an online adult education platform that helps companies provide tuition assistance and other education benefits. Other US employers with large numbers of hourly workers have partnered with Guild to provide tuition benefits, including the fast food chains Chipotle and Taco Bell, the retail giant Walmart, and the home improvement retailer Lowe’s. McDonald’s expanded its education benefit, a partnership with Cengage Learning, earlier this year, while Chick-fil-A increased the number of scholarships it was awarding though its longstanding annual program.

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Discover to Offer Employees Full Scholarships for Online Bachelor’s Degrees

Discover to Offer Employees Full Scholarships for Online Bachelor’s Degrees

The credit card company Discover has launched a new program that will pay for its 16,500 employees to earn bachelor’s degrees from three partner universities in certain business- and technology-focused majors at no cost to them. Fortune’s Lucinda Shen reported about the announcement on Tuesday:

Discover says the new program, dubbed The Discover College Commitment, will cover tuition, fees, books, and supplies for U.S.-based employees. The credit card issuer will offer a full-ride specifically for courses in cybersecurity, business, and computer sciences—burgeoning areas that the firm believes could strengthen its own business while also providing a long and stable career for its workers. …

Additionally, Discover plans to cover any income taxes that may be placed on employees due to the program. Due to IRS regulations, employers may only offer up $5,250 in tuition benefits to workers tax-free.

All employees are eligible, provided they work at least 30 hours a week for the company and have not been flagged for conduct issues or severe underperformance. Discover employees can complete their degrees at the University of Florida, Wilmington University, or Brandman University. The program is similar to one just launched by Walmart late last month, which also covers online or on-campus at University of Florida, Brandman University, or Bellevue University. Walmart’s benefit allows employees to study supply chain management or business at an out-of-pocket cost of $1 per day.

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Boeing Announces Partnerships to Expand Employee Education Benefits

Boeing Announces Partnerships to Expand Employee Education Benefits

After the US Congress cut the corporate tax rate from 35 to 21 percent in December, the airplane manufacturer Boeing announced that it would spend $300 million of its tax savings on corporate giving and employee programs, including a $100 million investment in learning and development over the next several years. The company is deciding how to structure that investment based partly on an internal survey, which found that 39 percent of Boeing employees wanted better technical development and 29 percent wanted new skills for jobs affected by new technology.

Now, we’re starting to see how Boeing is spending that money. The company announced several new education initiatives this week, focused on digital skills development and diversifying the company’s talent pipeline, GeekWire’s Alan Boyle reports:

The initiatives include a partnership with Degreed.com to give employees access to online lessons, certification courses and degree programs. Another initiative will put $6 million into a partnership with the Thurgood Marshall College Fund and several historically black colleges and universities. That investment will support scholarships, internships and boot-camp programs to help students experience what it’s like to work at Boeing, the company said.

There’ll also be several new programs to help Boeing employees enhance their technical skills and keep up with industry trends. The focus of the first program will be digital literacy, Boeing said.

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Walmart Announces College Tuition Benefit for US Employees

Walmart Announces College Tuition Benefit for US Employees

Walmart, the world’s largest private employer, announced at its annual shareholder meeting on Wednesday that it was introducing a new benefit for its 1.4 million employees in the US that will subsidize the cost of their college educations at any of three partner universities, the New York Times reports:

The giant retailer said it would pay tuition for its workers to enroll in college courses, online or on campus, to earn degrees in either supply chain management or business. Full- and part-time Walmart workers can use the subsidy to take courses at the University of Florida; Brandman University in Irvine, Calif.; and Bellevue University in Bellevue, Neb.

The three universities were chosen because of their high graduation rates, particularly among part-time students, and their experience with those already in the work force, Walmart executives said. The Walmart employees will not be obligated to continue working for the company after they get their degrees, and must put up only $1 a day toward the cost of classes.

Walmart says its goal with this benefit is to enable employees to obtain college degrees without taking out loans, in contrast to some other organizations’ tuition benefit programs, which require employees to pay their tuition up front and then seek reimbursement from the company. All Walmart employees become eligible for the benefit after 90 days at the company and are under no obligation to continue working there after they have earned their degrees.

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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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Employees Value Student Debt Benefits More Than Employers May Realize

Employees Value Student Debt Benefits More Than Employers May Realize

CommonBond, a financial technology company specializing in student loan refinancing and consolidation, recently surveyed 1,500 employees and 500 HR executives across the US to see how student loan debt assistance fits into employers’ financial wellbeing strategies and how well these programs were really meeting the needs of employees. The results of the survey indicate that student debt has a significant impact on the entire American workforce—not just millennials—and that organizations could make a big difference to their employees’ financial health by focusing financial wellness benefits on this form of debt.

Needless to say, CommonBond has a business interest in reaching that conclusion, but its findings happen to dovetail with what we already know from previous studies and our ongoing research at CEB, now Gartner, on global trends in education benefits.

Perhaps the most important of CommonBond’s findings is that 78 percent of employees who currently have or expect to accrue student loan debt want their employer to offer a student debt repayment benefit, including 65 percent of employees in this category over the age of 55. Among employees with student debt, repayment assistance is the most commonly requested financial wellness benefit, CommonBond found, yet HR leaders rank it as their third priority.

In our most recent survey of over 6,000 employees across the globe, we also found that employees value these benefits highly: 61 percent of employees see education benefits as an important factor in making a decision about a job offer. Of the organizations that offer education benefits, 90 percent provide tuition assistance—which has proven hugely successful at organizations from Cigna to Chipotle—but only 7 percent provide student loan reimbursement.

(CEB Total Rewards Leadership Council members should stay tuned, as more insights on education benefits from our annual benefits communication survey will be released next month.)

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