You want to keep your employees happy. If you don’t, they leave, and they take their knowledge and experience to another employer, probably a competitor.
So, how do you get them to stay? Some companies offer student loan repayment assistance. Many recent college grads may jump at the chance to have their student loans paid back. But what about the really great engineers who have already paid off their college loans, or didn’t have any to start with? While this perk may sound sexy and appealing, it doesn’t apply to a large segment of skilled tech workers.
Is there an alternative route to keeping and attracting engineering or tech talent burdened with student loans? Yes, and the answer is offer world-class, all-you-can-eat professional development programs.
According to Go2HR, up to 40 percent of people leave their job within the first year. It can cost thousands of dollars to replace an employee. ZaneBenefits suggests this cost is six to nine months’ salary on average. So, if a software developer making $130,000 a year leaves, companies could look at $65,000-$95,000 in lost recruiting and training costs. From a purely financial point of view, it makes sense to do everything you can to retain employees.
That 40 percent of individuals who leave within the first year? A lack of skills training and development is often their primary motivation to leave. As an employer in a tight labor market, finding ways to leverage and lengthen that time is a key factor in the business’ long-term growth. One simple tactic is to invest formally in your workforce’s skill development.
According to Corbett Inc., “76 percent of employees want opportunities for career growth,” and this was cited as one of the top three nonfinancial motivators. In 2016, a Gallup poll found that 87 percent of millennials say that development is important in a job.
In its “How Millennials Want to Work and Live” report, Gallup found that 59 percent of millennials state they find chances to learn and grow “extremely important when applying for a job.” This compares to 44 percent of Generation X workers and 41 percent of baby boomers.
On the other side of the coin, Forbes reported that according to the 2015 American Student Assistance survey “76 percent of respondents said that if a prospective employer offered a student loan repayment benefit, it would be a deciding or contributing factor to accept the job.” The make-up of that loan package and how extensive it is also can play a role in determining whether a job offer with a student loan repayment benefit is accepted over one that doesn’t have one.
Long-term skills investment is a better choice for many millennials who want to improve their professional skills. In most cases, it costs less and has better returns than loan-repayment programs. Further, the Gallup report stated that these opportunities to learn and grow are “the only aspect of retention that separates millennials’ needs from those of non-millennials.”
If your organization wants to attract the top talent from the younger generation, consider investing in learning and development rather than student loan repayment assistance as a perk.
Your business’ bottom line — and your employees — will thank you in the long run.
Kelby Zorgdrager is the CEO and founder of DevelopIntelligence. Comment below or email editor@CLOmedia.com.