Millennials with Large Amounts of College Debt Harder to Retain and Incent
MINNEAPOLIS (January 10, 2017) – In sheer numbers, millennials may soon rule the workplace. But new research indicates that the crushing amount of student loan debt they have incurred will rule key life milestones (i.e., marriage, children and homeownership) and affect their level of engagement at work.
According to an ORC International survey commissioned by Padilla, a top 10 independent public relations and communications agency, a large percentage of millennials believe their student loan repayments will last well into their 30s and even 40s. Survey results reveal:
As a result, millennial employees don’t feel financially secure. This financial insecurity delays traditional life events, impacts how they engage with the workplace and affects how employers can retain them.
"Every month, millennials are making student loan payments, which can feel like a mortgage payment," said Natalie Smith, senior vice president, Padilla, who leads the agency’s employee engagement team within its Corporate Practice. "This student loan debt impacts millennials of all ages and backgrounds. Given the competition for top talent, employers must update their approach in order to engage and retain millennials, especially among women, who were found to carry a bigger burden of student loan debt."
Smith is referring to the study findings that:
Student loan assistance trumps flexibility
For millennials, the next 10 to 20 years after college typically include major life milestones. From purchasing a new car and buying a house to getting married and having children, the survey showed millennials are choosing to delay these milestones because of their outstanding debt. These delays not only impact their personal life, but also their engagement levels at work.
For companies, engaged employees are more than just nice to have – they're integral to business success. Over time, highly engaged workforces outperform less-engaged companies by 147 percent higher earnings per share and enjoy a 90 percent better growth trend, according to a 2013 Gallup study.
With millennials expected to make up 75 percent of the workforce by 2025, it's imperative that companies understand how their needs, preferences and life stages drive their approach to and engagement with work. However, based on a 2016 Gallup study, companies are still missing the mark – only 29 percent of millennials consider themselves engaged at work, less than all other generations. And survey results revealed similar alarming stats that companies need to be aware of as their workforce changes:
"Engaged employees show greater initiative and approach work more passionately and creatively – essentially, they are willing to put in extra effort to help their company succeed. But when it comes to creating an engaged workforce, one size does not fit all. To excite and engage employees, companies must keep employees’ ages and life stages in mind," said Smith.
To engage and retain millennials – and other employees – companies should consider the following:
"Engaging and retaining millennial employees is a challenge all companies face," said Smith. "However, companies that understand the personal and financial situations facing millennials after graduation, and then tailor their engagement strategy accordingly, will reap the benefits of a highly engaged workforce that is willing to go the extra mile to drive the company forward."
View the "Weighing Down Workplace Engagement" infographic here.
About the ORC International survey
Padilla commissioned ORC International to survey 1,000 millennials with at least a four-year college degree between the ages of 22-35 on May 24-29, 2016 to take a closer look at the impact student loan debt is having on this generation. Respondents for this survey were selected from among those who have volunteered to participate in online surveys and polls. Because the sample is based on those who initially self-selected for participation, no estimates of sampling error can be calculated. ORC International is a collaborative and consultative research partner to hundreds of organizations around the globe.
Padilla is a top 10 independent public relations and communications company comprised of 240 employee owners. Padilla builds, grows and protects brands worldwide by creating purposeful connections with the people who matter most through public relations, advertising, digital and social marketing, investor relations and brand strategy. Padilla includes the brand consultancy of Joe Smith, the food and nutrition experts at FoodMinds and the research authorities at SMS. Clients include 3M, Barnes & Noble Education, BASF, Bayer, Blue Cross and Blue Shield of Minnesota, GE, Hass Avocado Board, Land O’Lakes, Mayo Clinic, Prosciutto di Parma, Rockwell Automation, U.S. Highbush Blueberry Council, the Virginia Lottery, Welch’s and Xcel Energy. Padilla is a founding member of The Worldcom Public Relations Group, a partnership of 143 independently owned partner offices in 115 cities on six continents. Make a connection at PadillaCo.com.
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