In an age when wage stagnation has led to calls for — make that “fights over” — mandatory wage increases and a mandated raise in the minimum wage, Iselin-based Provident Bank decided it would let something else determine its compensation packages: the market.
So, as they worked on their strategic plan last year, the bank’s leaders came to the realization that they needed a new plan to aid them in one of their biggest problems of the day: attraction and retention.
The solution: more money for employees.
But it’s not just a raise of the minimum wage — though the bank will now pay any full-time employee $15 an hour. Chief Human Resources Officer Janet Krasowski said the bank wanted to address the biggest need of its younger employees: student debt.
“We are keenly aware of the challenges many of our employees face with student loan debt,” she said.
Last week, Provident Bank introduced the Student Loan Paydown Program, and will now make a monthly payment — for up to five years — for any employee still carrying debt from college. The response, she said, has been overwhelming.
With the program only being out a week, 12 percent of eligible employees already had filled out the paperwork. It’s a number that’s growing every day.
Krasowski said she already can see how it is impacting retention. She assumes she’ll soon see how it impacts attraction.
“It really helps in two areas,” she said. “Talent is very tight. It’s difficult to find and keep new college graduates. They come in at entry-level positions and, though we try to move people up very quickly, if there’s another opportunity, they’re going to jump at it.”
“But the number of people coming out of college with debt is getting really growing, so we think it will serve as an attraction device, too.”
The incentives are not just for newer — and younger — employees. Those who long since passed the $15-an-hour threshold can benefit, too.
The student debt repayment also can be applied to new programs.
“We covered tuition reimbursement, but we didn’t cover MBAs,” she said. “Now we will.”
Eligible employees will receive up to $500 per credit for graduate-level courses, up to 12 credits per year, with a total cap of $15,000, she said.
Krasowski said the program was easy to set up — and that there are a number of vendors who can help.
“We started talking about this benefit in the spring of last year,” she said. “A couple of vendors have started forming repayment type of systems that make it very easy to administer.
“This is really not a heavy lift.”
Provident Bank Chairman, CEO and President Chris Martin said the moves reflect an understanding that its people are its greatest asset.
“These enhancements reflect our ongoing commitment to our employees,” he said. “We value their hard work and dedication and believe by raising our hourly wage and providing additional benefits, we are investing in the future of the organization.”
One of the best parts of the plans, Krasowski said, is that the bank developed them internally, rather than being forced to react to new rules and regulations.
“We look at our compensation philosophy in the same way we look at market pricing,” she said. “When we’re looking to fill a job, we say, what do we need to pay in this market? If our compensation is something mandated, it eliminated any flexibility.”