Although the worst of the pandemic is now hopefully behind us, the lifestyle disruption has created a monumental shift in how people work. This disruption has affected nearly every industry and has caused many individuals to take a step back and reevaluate what their career means to them. According to the Bureau of Labor Statistics, a record 4.4 million people quit their jobs in September of 2021.
It is no surprise that many employers are facing the challenge of attracting and retaining talent brought on by the pandemic. This issue is likely to continue through 2022 and beyond. Talented employees enhance productivity and provide leadership and are often the company’s greatest asset. In a recent study of 205 retirement plan sponsors, 81% said they are concerned about the increased competition for talent and 73% are struggling to find qualified employees to fill positions1. With job candidates scarce, companies will be vying for the same top-tier employees.
Many companies are utilizing their retirement and benefit packages and placing an emphasis on improving their employees’ financial wellness and wellbeing to help differentiate themselves as the employer of choice. Below are a few ways employers are now positioning themselves for success:
Financial Wellness Programs
In this ongoing pandemic environment, financial wellness programs are now becoming an essential workplace benefit. Employee financial stress is at an all-time high, and this can have unwanted effects on productivity and overall health. Employees are looking to their employers for help. But simply offering a financial wellness program won’t make much of an impact. A program needs to be measurable and actionable offering participants financial advice and an easy one-step at a time approach.
Employer Retirement Match
An employer retirement match is an attractive employee benefit that can help an employer set themselves apart. A recent study showed that more than 45% of respondents considered an employer 401(k) match to be a major factor when deciding to accept a job2. Many employers are now considering increasing their matches and shortening their vesting schedules. Even if employers had to suspend their matches in 2020 due to the pandemic reinstating a match is a positive message to communicate to employees. Offering a match also boosts employee enrollment into the plan.
Add A Profit-sharing Arrangement
Some employers are adding a profit-sharing arrangement to their 401(k) plans. This provides employees with a personal interest in a company’s success which can potentially limit employee turnover through rewarding ongoing service. For employers, a primary benefit is the flexibility whereby no contributions are required if there are no profits in a particular year.
Offer More Flexibility
Many employees settled into working from home and all the flexibility that went along with that. Some were able to achieve a healthy work/life balance with no longer having to contend with a long commute or set office hours. But workplace flexibility goes beyond just working from home. Some other benefits include providing caregiver leave and rethinking paid time off (PTO) policies.
Offer Additional Benefits
Some plan sponsors are adding benefits separate from the retirement plan such as emergency savings accounts (ESAs) and/or health savings accounts (HSAs). An ESA can be funded through automatic deposits set up through payroll deductions, similar to how employees fund their 401(k) plans. The money deducted into an ESA is taxed as income and is available to employees who have financial needs that are immediate.
If your company offers an HSA, now may be a good time to remind employees of this benefit and how to enroll in the account or to increase their contributions. This can be an effective and tax-efficient way to save for healthcare costs in retirement.
In addition to traditional benefit offerings, TRI-AD has deep experience administering custom-designed plans for companies wanting to create a more robust benefits package to help with retention and recruitment. We have collaborated with clients to design custom reimbursement plans to alleviate financial pressures on their workforce. We also administer emergency benefit programs such as the Employee Care Card. Additionally, we have experience with adoption, fertility, and surrogacy programs as well as professional development and educational reimbursement. TRI-AD is a total benefits solution delivering a streamlined service team and one portal called BenefitSpot for participants. The result is a fast, simple, and easy solution for both our clients and their employees, using the best technology and client/participant support in the marketplace. Contact us for more information on our services.
1Principal Financial Group, https://www.pionline.com/retirement-plans/firms-beef-retirement-benefits-attract-and-retain-employees
TRI-AD and our Associates’ suggestions or recommendations shall not constitute legal advice. No content on our website can be construed as tax or legal advice and TRI-AD may not be considered your legal counsel or tax advisor. Clients are encouraged to consult with their tax advisor and/or attorney to determine their legal rights, responsibilities, and liabilities. This includes the interpretation of any statute or regulation, federal, state, or local; and/or its application to the clients’ business activities.