Millennial Retention

Sam Carbone
Lucas Hatfield
Morgan Johnson
Christian Mactal
Natalie Maina
Nigel Smith
Jordan Sturgis

July 31, 2018

Agenda
• Background
• Business Need
• Company Value
• Analysis/Solution:
• Student Loan Assistance Program
• Current State
• Plan
• Financials
• Benefits/Risk
• Work-Life Balance
• Suggestions
• Strategies
• Benefits/Risks

2
Background
• Millennials: The generational demographic following Gen X
• Generally from early ‘80’s – mid to late ‘90’s
• Increasingly dominating the adult population in America

Millennial Population
100
99%
80
80%
60
61%
40 51%
41% 45%

20 24%
30%
17% 20%
0
2008 2010 2012 2016 2020
% of Millennials over 18 % of Millennials in total population
Source: The U.S Census Bureau June 2014 The Financial Brand 3
Current State of Millennials in the Workforce
2015 2025

25%

49% 51%

75%

Millennials Non-Millennials Millennials Non-Millennials

Source: The U.S Bureau of Labor Statistics – August, 2013 4

Business Need
Problem:
Turnover at a greater rate among millennial aged employees

WHY?
• Wanting a sense of purpose
• Lacking diversity of experience
• Limited opportunities for professional and monetary advancement

Result:
Consistent increase in company costs with continual decrease in retention.

5
Business Need

Millennial’s Tenure in the Workforce

8% 13% Less than 6 months

11% 6 months - 1 year

12% Less than 1 to 2 years

5%
Less than 2 to 5 years
Less than 5 to 10 years
11%
19% Less than 10 years
Would never leave
21% Don't know

Source: Deloitte Millennial Survey 2016

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Company Value

"We are committed to the success of our employees... We

fully embrace, respect, and value our differences and
diversity"

7
 Solution:
Student Loan Assistance Program
Current State
Job & Career Who pays for it? What does it mean to you?
Assistance Benefit
Tuition Reimbursement Southern Company Financial assistance that is
designed to help defray a
portion of continuing
education costs. You may be
reimbursed up to $5,250 in a
calendar year for eligible
expenses. Available upon
employment and with
management approval.

Source: Southern Company - Tuition Reimbursement Program

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 Loan Assistance
Most Educated Generation
College education is Millennials (2013) 34%
valued
Generation X (1995) 25%

Millennials have the Late Boomers (1986) 24%

highest Early Boomers (1979) 24%

college attendance Silent (1965) 13%

0 10 20 30 40
% w/ 4-year degrees

Source: Forbes – The Recession Generation: How Millennials Are Changing Money Management Forever 10
 Loan Assistance

"ONLY 4% of employers offered student loan repayment assistance"

• 58% - Prefer loan assistance over retirement plan

• 45% - Selected as the single most compelling employee benefit
• 90% - Would impact their decision with the company

Source: Student Loan and College Savings Benefits: The 401(k) for the Millennial Generation by Meera Olivia, CMO, Gradifi 11
Companies That Offer Loan Assistance
Company Name Amount Notes

Aetna $2,000/yr. Matching contribution of $2,000/yr. up to $10,000

Chegg $1,000/yr. No limit on years

ChowNow $1,000/yr. Operates as a matching contribution

Connelly Partners $1,200/yr. Paid as $100/mo. with a 5 year cap of $5,000 and $1,000 bonus in year 6

Fidelity $2,000/yr. $2,000/yr. for up to 5 years

First Republic $1,200/yr. Tier Structure, $100/mo. first year, $150/mo. second year, $200/mo. Thereafter

Gradifi $3,000/yr. Paid as $250/mo. up to $10,000

Natixis Global Asset Management $10,000 $5,000 paid at 5 year mark, followed by $1,000/yr.

Price Waterhouse Coopers (PwC) $1,200/yr. Paid as $100/mo. for up to 6 years

Staples $1,200/yr. Paid $100/mo. for a maximum of $3,600

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Loan Assistance
• Millennials also have the largest student debt.
• The average student debt totals roughly $35,000.

Millennial Student Loan Debt

Average amount of debt, per borrower, by year of graduation
35000
30000
25000
20000
15000
10000
5000
0
1993 1995 1997 1999 2001 2002 2003 2005 2007 2009 2011 2013 2015
Source: Student Loan Hero-- Student Loan Debt Statistics
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Student Loan Assistance Program
Proposed Plan:
• $15,000 lifetime cap
• The company would contribute 5.1% of the employee’s annual base pay
Example:
Employer Assistance Employee Responsibility

Annual Salary= $40,000 Annual Salary= $40,000

Company Contribution= 5.1% (maximum) Employee Contribution= 6% (minimum)

Annual Company Contribution= $2,040 Annual Employee Contribution= $2,400

Monthly Company Contribution= $170 Monthly Employee Contribution= $200

• Company can offer to pay the loan servicer monthly

• Provide proof of federal loans to qualify
• An employee must have earned his or her U.S. based degree from an accredited institution 14
If An Employee Leaves Company
STUDENT LOAN REPAYMENT SCHEDULE
Time Participating in % of Company Loan Match to be Repaid by the
Student Loan Assistance Program Company

Less than 1 year 100%

At least 1 but less 2 years 80%

At least 2 but less than 3 years 60%

At least 3 years but less than 4 years 40%

At least 4 years but less than 5 years 20%

5 years or more 0%

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Financials
Salary-Millennials (Jan. 2015-July 2018) Hourly-Millennials (Jan. 2015-July 2018)
271 Employees Hired 1,094 Employees Hired
153 Employees Left (153/3.5 yrs.=43/yr.) 663 Employees Left (663/3.5 yrs.= 189/yr.)
We believe 33% of the hires will take advantage of this We believe 15% of the hires will take advantage of this
program. program.
.33 * 43= 14 employees .15 * 189= 28 employees
Assumptions: Assumptions:
$11,500 Cost to Hire Salaried Employees $8,000 Cost to Hire Hourly Employees
$2,000 (the Company’s contribution based on an annual salary $2,000 (the Company’s contribution based on an annual salary
of $40,000) of $40,000)
Additional Student Loan Program Costs to Organization: Additional Student Loan Program Costs to Organization:
14 * $2,000= $28,000 28 * $2,000= $56,000
Potential Savings for Organization: Potential Savings for Organization:
Additional 14 people retained Additional 28 people retained
Avoided Costs: Avoided Costs:
14 * $11,500 in future recruiting costs = $161,000 28 * $8,000 in future recruiting costs = $224,000
Saves Organization: Saves Organization:
$161,000 - $28,000= $133,000 $224,000 - $56,000= $168,000

Savings for Organization (both salary and hourly millennials) = $301,000 16

 Loan Assistance
• Benefits to Company Goals Millennials Have Delayed Due to
1. Avoid future recruiting costs Student Loan Debt
2. Attract most qualified candidates Getting married 19%
3. Influence retention
Child's education 19%
4. Advantageous for ALL employees
Buy appliances 21%
• Benefits to Employee Home improvements 29%
1. Relieves a HUGE financial burden Buy a used car 33%
2. Encourages investment Buy a new car 37%
3. Promotes high company morale Purchase a home 48%
• Risks Invest Money 55%
1. Not guaranteed to decrease turnover rate Take a vacation 56%
2. Unwillingness to pay back company Save for retirement 63%
3. Not applicable to every employee
0 10 20 30 40 50 60 70

Source: Raddon September 2016 The Financial Brand 17

 Solution:
Work-Life Balance
Work-Life Balance

Our suggestions:

Compressed Work Schedule

A Path to Success

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 Work-Life Balance

Personal Consequences

Workplace Consequences

Poor Productivity

High Turnover/Burnout

Less Time for Family & Friends

Time Spent With Family Ruined
Poor Morale
Not Effected

0% 10% 20% 30% 40% 50% 60% 70%

Source: Small Business Trends– Stats on the Work-Life Balance of Your Employees 20
Work-Life Balance
Example of a Compressed Work Schedule:

Shifts:

• Four 9 hour shifts, one 4 hour shift per week

Applicable Employees:

• Full-time, salaried employees

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Current State

• 80% - Companies say they allow a flexible work schedule

• 38% - Employees report participating in a formal flextime program

• 44% - Of professionals are aware of their company’s flexible work policies

Source: Bureau of Labor Statistics 22

Work-Life Balance
Strategies to Achieve Career Success:
• Acknowledge that developmental growth is just as valued as the amount of years served with the company

• Take advantage of company resources to prepare oneself for advancement

• Allow mobility & exposure within different areas of the company

“…have to understand that these opportunities may include advancement in other areas
within the company. In the end, it is better to retain good talent and experience within the
organization than it is to lose it altogether”
-Rob Hembree

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Work-Life Balance

• 85% - Millennials seek flexible work options for more work-life balance

• 77% of Millennials say that flexible work hours would make the workplace more

productive

Source: Bentley University 24

Work-Life Balance
Compressed Work Schedule

• Benefits to Company
1. Increased Productivity

• Benefits to Employee
1. Better work-life balance
2. Promotes High Company Morale

• Risks
1. Scheduling conflicts
2. Time management
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Work-Life Balance
A Path to Success

• Benefits to Company
1. Mobility within the company decreases the number of outside hires

• Benefits to Employee
1. Transparent career goals
2. Achievable advancement within the company

• Risks
1. Inflated expectations for growth

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RECAP
Questions

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