"In today's world, the main way these younger people get promoted or earn more money is not within the company; they just switch jobs. That makes our situation very tenuous." - Anil Patel, Ajanta Consulting
Attracting, engaging and retaining talent is a challenge for many of today's top businesses. But for small businesses, these scenarios are becoming even more difficult, as the unemployment rate sits at historic lows and today's younger workers are more likely to switch jobs than wait for a promotion or raise.
According to a recent study from Deloitte, 43 percent of millennials say, if given the choice, they expect to leave their current employers in the next two years.
ADP client Anil Patel of Ajanta Consulting in Austin, Texas understands this dilemma better than most. His IT consulting firm, which primarily serves federal government clients, has struggled to keep its top talent from searching for greener pastures. At the same time, he says, the firm is expecting to hire up to four new employees to manage an upcoming expansion project. Retention is critical to ensure continued growth, customer satisfaction and overall productivity.
To help address their challenges around retaining talent, Patel turned to ADP Marketplace, an online storefront that offers ADP clients a collection of highly rated HR solutions that integrate with ADP's platform. As Ajanta searched for additional benefits that could help attract and retain employees, he found LoanBenefits™, a solution from ADP that enables his company to offer employees an easy way of paying off their college loans.
"Our big push right now is attracting a few talented new people," says Patel, noting that Ajanta has been an ADP client since 2015. "We also must retain existing employees — keep them interested. In today's world, the main way these younger people get promoted or earn more money is not within the company; they just switch jobs. That makes our situation very tenuous."
Turnover Hurts the Bottom Line
To meet customer needs, Ajanta tends to hire tech professionals in the 25-35 year old age range, which happens to correspond to the group with the highest rate of turnover.
"I don't know the exact data on it, but I can't imagine that the tenure of that age group of employees could be much longer than two years," he says. "And that's what we face, to the point that some of our employees have even been staying less than two years."
Of course, that negatively affects small businesses like Ajanta, primarily by cutting into profits due to unexpected turnover costs.
"We don't have a high-powered recruiting or HR team," Patel says. "I'm the only administrative person in our office, in fact, so turnover really hits our profitability."
Patel believes Ajanta can attract young talent and slow down turnover through a new student loan gifting benefit, and there is compelling data to support the effectiveness of this offering. For example, among those who finished a bachelor's degree in 2017 with debt, the average debt amount was $28,500, according to The College Board.
And while many employers offer 401(k) and tuition assistance benefits, only about 4 percent offer some sort of student loan repayment, according to a survey from the Society for Human Resource Management. Plus, most of today's younger workers don't take advantage of retirement savings benefits anyway, including a few at Ajanta, Patel notes. Loan gifting is a benefit that can positively affect an employee's financial situation right now, which makes the offering quite attractive.
Using LoanBenefits for ADP Workforce Now®, Ajanta will offer employees a monthly contribution toward their student loan balances. This is a weighty perk not offered by many organizations, and it will likely help to attract and retain talent from today's millennial workforce.
"Larger companies may offer higher salaries, so we wanted to do whatever we could to remain as competitive as possible and have this be a highlighted benefit that most other employers don't offer," Patel says.
Integration: A True Difference Maker
Patel notes that his ADP Marketplace experience has gone very well, especially given the fact that there is little administrative heavy lifting involved in offering the student loan repayment benefit via LoanBenefits for ADP Workforce Now.
"It's completely integrated with the ADP payroll system," he says. "That was one of the major things I wanted…complete, seamless integration."
Another benefit from LoanBenefits for ADP Workforce Now that Patel favors grants each participating employee the option to speak with a loan gifting financial advisor who can guide participants toward the best payment program options for their situations. Once the loan gifting program is up and running, Patel expects to explore ADP Marketplace for other solutions.
"If there's anything beneficial out there that will help us attract and retain talented people, I will definitely be interested," he says.
About Loan Benefits
LoanBenefits is integrated with ADP Workforce, so set-up is simple. Your employees are automatically loaded into ADP's system, and the administration is accessed through your ADP Workforce single sign-on, making it quick and intuitive. LoanBenefits integrates with your payroll and allows you to make payments directly to the hundreds of banks that hold your employees' student loans.
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