A burrito bowl with a side of student debt relief? Yes, please.
It’s “burrito season” at Chipotle—aka the old go-to you hit up when you don’t know what to get for lunch. And to make it through the busy season, the company is prioritizing recruiting and retaining Gen Z restaurant workers, announcing on Jan. 23 new employee benefits, including a student debt relief program.
Over 73% of Chipotle’s 110,000 US restaurant employees are Gen Z, the fast-casual chain noted in a press release. As of March 2023, Americans owe $1.6 trillion in student loan debt, according to the Federal Reserve Bank of New York, and as of 2022 some 41% of US adults under 30 had student loan debt, according to Pew Research Center shared with HR Brew.
Through the program, restaurant employees have access to SoFi’s student loan verification service, which allows employers to offer their staff a low cost loan repayment benefit while contributing to their 401(k) accounts following one year of employment with the company. Chipotle’s corporate employees have their own 401(k) match benefit that also kicks in after a year, Erin Wolford, a company spokesperson, said via email.
“We are focused on providing our current and prospective employees with clear pathways to advancement. By offering new benefits that support their mental and financial well-being, these individuals are more likely to join or stay and grow with us too,” Ilene Eskenazi, Chipotle’s CHRO, told HR Brew via email. “We want to provide comprehensive compensation packages that address the needs of our current and future workforce.”
Paying down student debt and saving for retirement typically don’t go hand-in-hand. Indeed, 30% of US adults with student loan debt have not saved for retirement, according to a study by the Achieve Center for Consumer Insights. Chipotle will match up to 4% of an employee’s 401(k) contributions if they are making either federal or private student loan payments.
Quick-to-read HR news & insights
From recruiting and retention to company culture and the latest in HR tech, HR Brew delivers up-to-date industry news and tips to help HR pros stay nimble in today’s fast-changing business environment.
Thanks to a provision in the SECURE Act 2.0, which took effect earlier this year, employers can now match their employees’ 401(k) contributions based on their student loan payments, HR Brew previously reported. If an employee makes $400 in payments toward their student loan, employers can view that as deferred from their paycheck and make a matching contribution into their retirement account.
Zoom out. Employers that offer student loan repayment benefits may have a leg up when it comes to employee retention, according to insurance brokerage and consulting firm Woodruff Sawyer.
The majority (86%) of respondents to an August 2023 Woodruff Sawyer survey said they would commit to a job for at least five years if the organization offered a student debt relief program. Despite the demand for student loan benefits, just 7% of US employers offered it in 2022, according to SHRM. Google, Hulu, Abbott, as well as fintech firms Method and Pando are among those that offer the benefit.
“Lack of financial resources should not prevent someone from accessing the opportunities that come with education,” Google wrote in a blog post announcing its student loan benefit in 2020. “We’re hoping this student loan repayment program gives our workforce some relief from student loans and helps them build more financial stability over the long term.”