Preventing Turnover with Debt Help 

Voluntary employee turnover rates are rising and multiple sectors across industries face challenges. According to a recent Mercer report, Canadian employee turnover has surged from 15.5% in 2021 to12.4% in 2022. A recent report from recruitment firm Hays, supports the finding, revealing a staggering 71% of Canadians are considering leaving their current jobs within the next 12 months - the highest figure ever recorded by the organization.

With financial incentives consistently ranking among the top reasons employees leave, businesses increasingly recognize the importance of addressing employees' financial concerns to mitigate attrition rates.

98% of employees enrolled in Marmot’s student loan repayment program have remained with their employer since the benefit was introduced. ¹

Summary Impact of Employee Turnover  

Costs associated with employee turnover extend beyond recruitment and onboarding expenses. Businesses also face productivity losses, new-hire training costs and disruptions to team dynamics. High turnover rates can harm company morale and reputation, potentially affecting future recruitment efforts.

The Power of Loan Assistance Programs   

Offering unique benefits can set organizations apart and drive results for retention strategies. Student loan repayment help has emerged as a valuable retention tool, particularly as student loan debt reaches unprecedented levels. Limited survey data in Canada reveals the potential impact of such benefits on employee retention.

Marmot's data depicts a promising trend - with 98% of enrolled employees remaining with their employer since the introduction of student loan repayment benefit two years ago.

Early insights corroborate findings from the American Student Assistance Survey (2018), suggesting that such benefits significantly influence employee loyalty and satisfaction.

Low Cost, High Returns  

Implementing a student loan (or mortgage) repayment assistance program is cost-effective, with minimal additional expenses and minimal administrative requirements. Setup is easy and fees are low. Consider the following example:

• A 100-person company has Voluntary Turnover of 15% (15 employees a year leave voluntarily)

• The cost of replacing departing employees is 20% of their salary. The average salary of the 15 employee departures is $60,000.

• The company could face an average replacement cost of $12,000/per departing employee

• The company offers debt relief benefits, 14% of employees enroll and annual administration fees amount $1,500 per year.

• Marmot's early data correlates with industry reports supporting the significant enhancement of employee retention through student loan repayment assistance. On the premise that one employee remains with the company due to this benefit returns could be as large as 800%.

Advisor Help   

Benefit Advisors can play an important role in helping employers navigate turnover challenges. As voluntary turnover rates continue to rise, Advisors can assist clients to proactively design and implement programs that address and target employees' financial concerns. With impactful benefits offering help where needed, businesses can cultivate a more loyal, engaged and productive workforce.

Stay tuned for our next blog, where we will delve into MHB, Marmot’s Mortgage Help Benefit, another product for enhancing employee retention through innovative benefit offerings.

1. Excluding employees who have paid off loans and employees on sabbatical/parental leave