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 positions. 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:
In this on-going 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.
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 job. 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.
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 flexibility whereby no contributions are required if there are no profits in a particular year.
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 setup 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 program, now may be a good time to remind employees of this benefit and how to enroll into the account. This can be an effective and tax efficient way to save for healthcare costs in retirement.
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.
These are just some of the ways employers can help recruit and retain the high-quality employees that their companies depend upon. For further questions, contact us.