- An emerging benefit. With housing costs continuing to rise, homeownership feels out of reach for many employees. As a result, some companies find the idea of helping employees purchase a home intriguing, according to a JW Surety Bonds survey.
- What employees want. The survey also found that employees would sacrifice some existing benefits for assistance in making homeownership a reality. For instance, nearly 33% of employee respondents said they would prefer housing benefits over a pay raise.
- Partnerships with local programs. Baltimore’s Live Near Your Work program matches employer contributions of $1,000 to $2,500, for total incentives of up to $5,000, to help employees purchase homes near their place of employment.
As skyrocketing housing costs continue to make homeownership more of a dream than a reality for many employees, some employers are stepping in to help by absorbing part of the cost of renting or purchasing a home, according to a recent survey.
The January JW Surety Bonds survey, which polled 310 employers and 710 employees, found that 25% of employers are considering offering housing benefits to employees in 2024. Those that already do so plan to offer an average of $6,201 in assistance per employee this year.
It appears many employees would welcome this type of help:
- More than 25% of employees who participated in the survey would switch jobs for employer-sponsored housing benefits.
- Nearly 33% of employees would prefer housing benefits over a pay raise.
- 43% of employees are willing to sacrifice PTO for housing benefits, with 26% ready to give up 10 to 15 days.
Responses varied across industries. Housing benefits were particularly attractive to employees in the food and hospitality sector, with 61% saying they would be willing to change jobs or even careers for roles that offer such perks. Additionally, a sizable number of healthcare workers (40%) would consider changing jobs within their industry if it meant they would receive housing assistance.
However, it is employers in marketing (53%), finance (41%) and information technology (31%) that are most likely to be considering providing the perk. This inclination was more pronounced in small (32%) and medium-sized (31%) companies than in large ones (25%).
The survey also found that some employers see offering housing benefits as a way to encourage employees to return to the office now that the COVID-19 pandemic is over. One in 6 employers said they plan to offer housing benefits in 2024 to facilitate a transition from remote to in-person work. About half (47%) of remote workers said they would be willing to return to the office if housing benefits were part of the deal.
Moreover, employees who receive housing benefits are more likely to rate their overall work productivity as “high” (72% versus 56%).
While the survey suggests that providing housing assistance can benefit both employees and employers, the perk is still rare. Only 13% of employees currently receive help from their employer with renting or buying/owning a home.
Possibilities for Partnerships
The cost of homeownership for first-time and lower-income buyers is a real issue, said Ron Seifert, senior client partner and North America workforce reward and benefits leader at Korn Ferry. In recognition of this, some local markets have introduced programs that can facilitate homeownership for that population, he said, and employers may be able to tap into this.
For example, the nonprofit Live Baltimore offers several ways to help workers purchase a home in the area. The idea, according to the organization’s website, is to make buying a home more affordable by lowering buyer closing costs and boosting the down payment.
One such program, Live Near Your Work, is a partnership with participating employers and the City of Baltimore that specifically encourages homeownership near workers’ places of employment. The city matches employer contributions of $1,000 to $2,500, for total incentives of up to $5,000.
To be eligible for the program, the home buyer must earn a homeownership counseling certificate before making an offer on a home, must live in the home as a primary residence, must put at least $1,000 of their own money toward the home purchase, and must work for an employer that participates in the program.
Participating employers may choose to set additional eligibility requirements, such as criteria related to geographic area, employment status and income level.
According to Seifert, employers should continually assess their total rewards program to understand how well it’s working and to make sure it aligns with the market and supports the organization’s broader talent strategy. Everything should be up for consideration, including how to address the basic question of cost of living within the communities from which they’re recruiting, he said.
“As an employer, asking the question, ‘How can we ease the way for employees so they can bring their best and unleash their potential?’ is a great place to start,” Seifert said. Knowing what the barriers are and where the opportunities are is key, he added, noting, “Cost of residence, rent/homeowning and commuting are real stressors for employees.”
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