The job market in the mechanical contracting industry is looking healthy. In fact, mechanical contractors are in high demand. According to the U.S. Bureau of Labor Statistics, mechanical specialties will add roughly 19,000 jobs by 2029, as the mechanical industry is projected to grow around 5% between 2021 and 2031.
As a business owner in this industry, how will you stand apart from your competition in the hiring and retention of skilled workers? One way to win in today’s hiring landscape is by taking a closer look at the benefits you’re offering current and future employees.
Employer-Assisted Housing
Historically, the spring and summer months are the busiest times of year in the real estate market. As the weather warms up, it’s a perfect time for employers in the mechanical contracting space to consider offering homeowner assistance as an employee benefit. Homeowner assistance benefits, or employer-assisted housing (EAH) programs, are becoming increasingly important for employees as the cost of living rises due to inflation and high mortgage rates.
A record number of Americans are struggling to afford rent. The latest data from the Harvard Joint Center for Housing Studies, released in January, found that a record high 22.4 million renter households—or half of renters nationwide—were spending more than 30% of their income on rent in 2022. On top of that, home prices continue to surge in most major US metro areas. According to Realtor Magazine, some markets even posted double-digit gains in home prices.
And according to a report by SoFi, one in five employees plans to delay buying a home due to financial issues, leading to increased demand for employer assistance.
As homeownership becomes more unattainable for younger generations, adding homeowner assistance as a permanent part of benefit offerings may become the necessary benefit your business will need to offer to support employees and attract talent in the contracting space.
How EAH Programs Work
Homeowner assistance benefits are similar to how an employee would contribute a portion of their income to their 401(k), except there’s an option to dedicate a part of their income to future homeownership.
By offering employees the option to dedicate a portion of their income towards homeownership and providing a matching contribution, employers can encourage their employees to save for a down payment on a home. This benefit can help younger generations who may need help saving for a home in today’s market.
Many Ways to Help
At its core, EAH is a benefit program where employers provide assistance—monetary or otherwise—to help employees purchase or rent homes near their workplaces. This can take various forms:
● Down Payment Assistance: Employers provide funds to assist employees with the initial down payment on a house.
● Shared Ownership: The employer may purchase a share in the property, which the employee can buy out over time.
● Guaranteed Loans: Employers may guarantee or subsidize housing loans, which can secure lower interest rates for the employees.
● Rental Assistance: This includes subsidies or discounts on rents for homes close to the workplace.
Affordability Crisis
With home prices soaring, many employees find the dream of homeownership slipping out of reach. EAH programs bridge this gap by providing the necessary financial support. By doing so, employers aren’t just helping employees own homes, but they’re also stabilizing communities and reducing long commutes.
Benefits for Employers
Of course, EAH programs don’t just benefit employees. These programs can also offset the need to offer higher salaries and bonuses while simultaneously increasing the average tenure of a company’s employee base.
The top benefits to employers who offer EAH benefits to employees include:
● Improved Recruitment and Retention: In a competitive job market, EAH programs can be a deciding factor for employers in high-cost-of-living (HCOL) regions.
● Building Cohesion and Boosting Staff Morale: By helping employees live closer to work, employers foster a sense of community both within and outside the workplace. This leads to improved morale, reduced turnover, and a stronger connection to the local community.
● Vesting Strategies to Improve Tenure: Employers can also consider creating a vesting schedule for EAH benefits to improve employee tenure.
Major Corporations Are Offering EAH Benefits
According to Fortune, major corporations in the US have begun offering EAH benefits to their employees. Walmart, for example, offers mortgage assistance and closing costs subsidies to qualifying employees. Other employers offering housing benefits include major universities, public school districts, and even the US federal government.
Long-Term Financial Well-Being
EAH programs can set employees on a path of long-term financial stability. Homeownership is often a cornerstone of personal wealth and financial security. By facilitating this, employers are investing not just in the immediate needs of their employees but also in their long-term financial health.
These housing assistance programs can help build equity within the firm while also offering environmental, social and governance benefits.
With rising inflation, purchasing power diminishes. Meanwhile, high-interest rates make borrowing more expensive. EAH programs act as a buffer. By subsidizing loans or providing down payment assistance, employers can alleviate some of the pressures employees feel due to these economic challenges.
The ripple effect is profound: revitalized local economies, reduced traffic congestion, and a more cohesive work environment.
How to Begin
Survey your employees to determine their housing needs and preferences. This assessment can provide insights into what kind of housing assistance employees value the most, whether it’s down payment assistance, rental subsidies, or housing counseling services.
Next Steps
In an era of economic uncertainty characterized by rapid inflation, escalating home prices, and prohibitive interest rates, the role of employers in supporting the housing needs of their employees becomes pivotal.
EAH programs offer a strategic solution that benefits both employers and employees, creating a synergistic environment where businesses thrive, employees flourish, and communities prosper. Embracing such programs is not merely an act of corporate responsibility but a sound business decision in today’s challenging time
John Newcome is Vice President and Senior Consultant for Kelly Benefits Strategies (KBS), one of the nation’s largest and fastest-growing providers of benefits administration and technology, broker and consulting services, payroll solutions and other comprehensive tools and strategies serving businesses of all sizes.