In the ultra-competitive labor market where the unemployment rate hovers at just 3.5 percent, executives, human resource managers and hiring managers are searching for ways to differentiate their employee benefits programs. To attract and retain Millennial and Generation Z (Gen Z) talent, organizations must think outside of the traditional benefits package. Here’s why housing-related benefits can be a home run.
Addressing Benefits Challenges
In the race to differentiate and effectively recruit talent for the long term, employers are facing two main challenges.
First, the modern workforce is multigenerational and represents Baby Boomers (born between 1946 and 1964), Gen X (born between 1965 and 1980), Millennials (born between 1981 and 1996) and Gen Z (born in 1997 to today). As a result, the benefits and perks that appeal to one group may be inconsequential to another, which is why companies should considering adding voluntary benefits programs to address the needs of specific groups.
Second, traditional benefits packages (healthcare, dental, paid holidays, etc.) are important, but don’t carry as much persuasive pull as they once did. Today, employers must get creative.
To build employer loyalty among younger workers, organizations must consider offering benefits that align with their employees’ personal beliefs and longer-term goals, including remote work options, student debt relief, experiences and company culture. And now, housing opportunities matter too.
The Upside of Down Payments
Housing benefits, specifically assisting new hires with a down payment or loan, are gaining traction. Research from Freddie Mac reveals that 87 percent of Millennials and 83 percent of Gen Z professionals report they’re interested in owning their own real estate. In addition, when compared to all other generations, Gen Z is twice as likely to be saving for a home. This information reveals that not only are young professionals interested in home ownership, they recognize the importance of saving for a mortgage and down payment instead of incurring more debt.
This is where employers can make a difference.
Some organizations are pushing the boundaries of their benefits package by contributing funds to pay for a housing down payment. HomeFundIt (initially named HomeFundMe) is a platform whereby employers (as well as others) can contribute to an employee’s down payment much like they would with a 401(k) account. Think of it as crowdfunding for housing. Feather the Nest is another similar platform.
Some employers are also offering housing loans or loan guarantees to assist employees who have high student debt or a less-than-stellar credit history secure approval and funding. Other companies, like Google, are taking matters into their own hands by financing affordable housing to not only help employees with ownership, but to also ensure they can live near their work.
Finally, organizations like Johns Hopkins, University of Southern California, Brookhaven National Laboratory, Chicago Public School District, Yale New Haven Hospital and the U.S. Government, offer housing grants and loans to help attract and retain employees.
At the end of the day, employees need a place to call home. While renting remains a popular option, the majority of Millennials and Gen Z want to put their personal stake in the ground. Owning real estate is proving to be a key to staying put — both at home and in the office.