Some workers are choosing housing and student loan benefits over a retirement plan, and it says a lot about America's cost-of-living crisis
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- Workers and companies are trying non-traditional job benefits to combat the rising cost of living.
- Housing assistance, student loan repayments, and commuting support are increasingly popular.
- Unconventional benefits could also entice remote workers back to the office.
As Americans deal with the rising cost of living, more companies and workers are rethinking the types of job benefits that are most important.
Recent surveys have shown that some workers prefer non-traditional job benefits such as housing assistance and help with commuting costs over things like extra vacation time. Additionally, companies are getting creative with their benefits packages so that can help both the business and the employees, such as matched contributions to help pay off student loans in place of retirement benefits and adoption assistance, said John Newcome, vice president and senior consultant at the benefits administration firm Kelly Benefits.
"Employees want a holistic approach to benefits that address their overall well-being, including work-life balance, mental health support, and financial guidance," Newcome told Business Insider. "Standard benefits, like medical, dental, or vision care, are typically included in most employee benefits plans. However, many employees now seek more specific benefits."
The most direct form of housing assistance can be in the form of rental or down payment assistance, which Newcome said more companies are starting to implement, especially among public entities, such as major universities, public school districts, and even the US federal government. However, there are other more creative ways to help with home ownership, he added.
For example, a company can guarantee a loan to help secure a lower interest rate for an employee or even share ownership of a house with the worker, which they can buy out over time.
Walmart is one example of a company offering housing assistance to employees. When qualified workers buy a new home or refinance a house, Walmart will help with the process and pay part of the closing costs.
Elon Musk's tunneling company, Boring, announced plans in 2023 to build a 110-home subdivision for employees near the Austin suburb of Bastrop. The homes are expected to be offered as lease to own, with prices below market rate and close to facilities for Boring and other Musk-led businesses, Tesla and SpaceX.
Non-traditional perks can be chosen to help with more immediate needs
Other non-traditional perks on the rise include some voluntary benefits that can lower or eliminate living expenses, said Newcome. These include family planning benefits, such as help with fertility procedures or adoption costs, along with supplements to basic health insurance, including mental health support and even pet insurance.
Student loan repayment assistance is another benefit growing in popularity, said Newcome. In some cases, workers can choose this benefit and pause other benefits such as retirement contributions.
"With workers of all ages repaying student debt, student loan assistance should be a key consideration in the enhancement of employee benefit programs," Newcome said.
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One way companies are offering student loan assistance is similar to a 401(k), in which the company makes matching contributions to the student loan each month based on how much the employee pays.
In cases where employees can choose between student loan help and retirement contributions, it can help keep the company and the workers from having to take on additional benefits costs.
To be sure, there can be downsides to accepting these perks. Many Americans are facing a retirement crisis without enough saved up for their post-work lives. Postponing retirement savings in favor of more immediate needs could just be trading one problem in and creating a bigger one later.
In addition, some of these perks, such as supplements to health insurance, might be offered as optional with an added cost. If taken, the employee faces potentially lower after-tax, take-home pay.
Non-traditional benefits could also convince workers to rethink remote work
Rethinking employee benefits could also be the key to enticing remote workers back to the office.
In a survey of 1,020 employers and workers about office perks, performed by the bonding and insurance company JW Surety Bonds and published in January, 47% of respondents said they would be willing to return to the office if housing benefits were offered. Additionally, 69% said they would be willing to change their job or career for employer-based housing benefits.
Additionally, 43% said they would take less vacation time in exchange for help with housing costs, and 30% said they would prefer housing assistance over a pay raise.
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Similarly, providing employees with commuting assistance could be key to luring more workers back to the office in a post-pandemic world, according to a survey of 1,038 US adults and remote employees performed in February by the cloud communications company Ringover.
When asked which perks would convince them to give up remote work, the top response was "paid commute," with 83.2% of respondents picking that as an important incentive.
As the landscape of employee benefits evolves to meet the changing needs of the workforce, companies are becoming more innovative.