Well, we better talk about this PwC loan assistance thing, hadn't we?
For starters, it's a pretty unique perk. The Washington Post reports that only 3% of companies offer loan repayment, citing a survey from the Society for Human Resource Management. It's typically used to attract a particular type of employee such as teachers or health care professionals.
As noted in ANR this morning, PwC's version of this benefit will be made available to all employees below the rank of manager starting next year:
Starting next July, all of PwC’s associates and senior associates—roughly 45 percent of the firm's 46,000 employees, ranging from entry-level to about six years of experience—will become eligible to receive as much as $1,200 a year for up to six years toward their student loans. The benefit will be paid directly to the loan servicer of certified student loans, though it will still count as income for employees.
Right, the taxes. So you're looking at about $900 net. NBD, in the grander scheme of things. And, from the sounds of it, you don't even have to mess with remitting the funds to loan servicer yourself. That's kinda nice, too. And, year-to-year it's a relatively small investment by the firm. If you use the numbers above, we're only talking about $25 million a year in benefits. Sure, the expense will grow slightly with headcount, but this is a firm with revenues in excess of $30 billion. I mean, how much do you think PwC spends on tchotchkes? I'd put in the range of $100 million-$150 million. $25 million a year is nothing.
But PwC's narrative for this offering is what I find most interesting. Here's what chief purpose officer (that's a real title) Shannon Schuyler told USA Today:
PwC's commitment isn't meant to attract more Millennials to the company, says Shannon Schuyler, PwC's chief purpose officer. Instead, she hopes it reflects a broader set of corporate values.
"It’s something that we want to be at the core of who we are … when you look at 40 million Americans having student debt, that’s a huge problem, and if we can figure out how to be even a small part of solving that, that’s what we want to do."
Fun fact: Shannon Schuyler also sells bridges in Brooklyn! You should look her up if you're in the market for one.
I kid, I kid. But seriously! If you read any of the articles written about this, everyone else is saying that the perk is designed to attract Millennials and nothing to the effect of, "Gosh, it's sure swell of PwC to help address the student loan crisis." In that same USA Today piece, the publisher of Edvisors.com, Mark Kantrowitz, says:
"It is a good recruiting tool, because recent college graduates are incredibly worried about their student loans," Kantrowitz says. Plus, he says, prospective employees may be attracted not only to the monetary benefit, but to "having an employer who is responsive to your needs."
And some other guy in the same article:
"Any place where they want to bring in the best and the brightest and you don’t just want the wealthy kids," he says. "Today you want diversity, ethnicity, gender diversity. To get the best and the brightest (who) are also those things, you’re looking at people who might be coming in with a little student debt."
And some other guy in the same article:
"The reality is a young adult with $35,000 and $40,000 in student loans, they don’t care about a 401(k)," says Andrew Josuweit, CEO of Student Loan Hero, a website that helps users manage student loan accounts and research repayment options. "They care about paying off their student loans."
But back in the Post, here's the PwC global talent leader, pitching the altruism:
"We have reached a tipping point," said Michael Fenlon, global talent director for PwC. "Student loan debt impacts the ability to save for retirement, so it has lots of secondary impact as well. We saw this as a way to provide leadership on a major societal issue, as well as something that's really important to our people."
It's adorable any time a mega-company says they're doing something in the interest of a "societal issue" because, in reality, they're doing something to benefit
themslevesthemselves handsomely and then they're trying to do something to benefit society. PwC isn't in the business of helping society. If they were, they wouldn't take a dime from their audit clients.
No, PwC wants the Millennials. All of them. It's a war for talent out there and PwC figures it has to play hardball with the likes of Google, Facebook, Netflix, et al., and if it's actually going to compete for the coveted STEM talent as they claim, they need to stand out from the all-you-can-eat buffets, dog runs in the lobby, unicorn riding lessons, day trips to the Moon and whatever else the tech companies give their people.
The key statement above is the one where the guy said, "having an employer who is responsive to your needs." The annual $1,200 amounts to 2% of a $60k salary so it's pretty silly to get worked up over the actual amount. What PwC is telling all the Millennials/Gen Zs or whoever else will listen is, "We hear you! Tell us what you want!"
This is one of the most common demands that this group has: They want employers to hear their concerns. PwC, believe it or not, is hearing them! The firm will use this message to differentiate themselves not only from the rest of the Big 4, but any other employer who's after young, diverse workers (and not just the wealthy ones!). Something like, "Sure, those employers do nice things, but only 3% of companies actually provide student loan assistance. That makes us different. That makes us special." Crikey, if their marketing department doesn't already have the 50-slide deck prepared, let them know I'll do it for nominal fee.
SIdenote: it's kinda fun that this news totally steals the spotlight from Deloitte's announcement of revenue results. Since the numbers were pretty meh, Deloitte might not mind.
But what's far more important is the effect this will have on the recruiting efforts of the entire accounting profession. As we've discussed, the recruiting pool is larger than ever but that matters little to smaller firms because: 1) They don't know how to recruit the people they need; 2) They can't recruit the people they want. PwC already has a slew of benefits that small firms can't touch, but this new loan assistance perk is far more visible and important than a 401(k) match or pet insurance. Loan assistance will hit those poor accounting students saddled with debt in their loins, making small firms look even less attractive. Sorry, small firms.
In the end, all the talk about being one piece of the solving the student loan crisis puzzle is fine, but PwC probably doesn't care if anyone believes that story or not. It's just softens the shrewd move they're making to get a leg up in the talent war. It's pretty impressive. I'll bet the other Big 4 firms wish they'd thought of it first.