An inspired idea for your tax cut
From the pages of In Business magazine.
Three months back, we prepared a feature on mounting student loan debt, and we found that local employers are trying to help young workers by taking some of the repayment burden off their hands. Call it a cutting-edge employee benefit or call it an investment in worker attraction and retention, but it’s a national trend that is starting to take hold.
It’s also a trend that’s bound to intensify with the substantial reduction in the corporate income tax rate that was enacted and signed into law in December. By cutting the corporate rate from a global high of 35% to a more competitive 21%, the federal government not only has given some employers the wherewithal to offer wage increases and bonuses, but also to help debt-laden young professionals. Perhaps not all employers, but many of them.
Just ask Cliff Mason, president of Total Administrative Services Corp., a Madison-based employment benefits administrator and our 2018 large company “Executive of the Year” honoree. TASC has both seen and taken part in such trends, and Mason notes that retention is about more than wage hikes. “We are in the process of rolling out, in the next six months, the ability for employers to repay the college loans of their employees,” Mason notes. “Many companies such as TASC for years have had programs where we would reimburse employees for tuition for courses they would take. We’re seeing trends around the country now where employers are saying, ‘Gee, if I’ve got someone who has the education and they are on my staff, why not help them pay their student loans?’
“I think what you’ll see is employers using this tax money to provide incentives to highly productive employees and for ways to attract and retain employees because it’s not always about the dollars, and it demonstrates the company cares. As you think about millennials and our emerging workforce and the college debt they have, it’s incumbent on employers to get more creative.”
Just as employers are using the tool of technology-enabled remote working to retain employees who move to other geographic regions, or lure new workers who want to continue to live in other regions while they work remotely, they also should consider the corporate tax cuts as a “tool” to attract and retain the next generation. Given the choice of a raise or help with student debt, many young workers will choose the latter.
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