Enhancing retirement benefits can create a competitive edge
An attractive benefits package has long been an effective recruiting and retention strategy. However, today’s tight labor market, due in part to record numbers of workers quitting or changing their jobs in what has been termed “The Great Resignation,” has plan sponsors exploring ways their organization’s retirement plan and its associated offerings can provide an important advantage over industry and geographic competitors with both current and prospective employees.
What you should know
48% of U.S. workers are currently searching for new jobs
81% of plan sponsors are concerned about increased competition for talent
Defined contribution plan sponsors can consider the following plan design enhancements to help attract and retain employees:
- Expanding eligibility requirements
- Shortening or eliminating vesting schedules
- Increasing the employer match
- Establishing or increasing employer non-matching contributions
- Adding a profit-sharing component to the 401(k) plan
Providing a robust employee education program that includes general financial wellness training can also help make companies more attractive to workers.
Plan sponsors can also consider adding benefits that may be separate from the retirement plan, including student loan debt repayment programs, emergency savings options, or equity compensation such as employee stock purchase plans.
Customized benchmarking of the retirement plan and/or comparison against peers in specific industries and geographic regions can be used to examine how an organization’s benefits package measures up.
Advisors can help plan sponsors explore, evaluate, and implement ways to optimize a retirement plan’s effectiveness as a hiring and retention tool. Comprehensive plan design consultations can review options available both inside and outside of the plan which could serve as significant differentiators for top talent.
Are you, as a plan sponsor, using your retirement plan as a tool to attract and retain employees? Recent survey data from 2021 suggests that 48% of U. S. workers are currently searching for new jobs and 81% of plan sponsors are concerned about increased competition for talent. With this comes an increased focus on employee benefits as companies of all sizes and plan sponsors must react to “The Great Resignation.”
Hello and welcome, my name is Dominic Sgattoni and I am a Senior Retirement Plan Advisor here at PNC Bank. An attractive benefits package has long been an effective recruiting and retention strategy. Yet, in today's tight labor market organizations are looking for a competitive edge. The following are five key concepts that we believe plan sponsors should know and consider.
Number one, defined contribution plan sponsors can consider plan design enhancements to help attract and retain employees, including expanding eligibility requirements, shortening or eliminating vesting schedules, increasing the employer match, or simply adding a profit-sharing component to the existing 401(k) plan.
Number two, adopting a robust education program that includes a focus on general financial wellness and retirement readiness. The key here is to dedicate the necessary time on creating your education strategies each year and executing on them, which then can include group sessions and one-on-one meetings with employees. In the end, this education focus can help make companies more attractive to workers.
Number three, benefits that may be separate from your retirement plan can also be included. For example, student loan debt repayment programs, emergency savings options, equity compensation, and employee stock purchase plans are just to name a few.
Number four, it is a good idea to undertake customized benchmarking of your retirement plan. This can come in the form of a plan comparison against industry peers, or simply a fee and service review compared to plans of similar size.
And, finally, number five. Advisors can conduct comprehensive plan design consultations to review options available both inside and outside your plan. The overall goal here is to evaluate and implement ways to best optimize your retirement plan’s effectiveness as a hiring and employee retention tool.
I hope this information proves to be helpful. If you should have any additional questions, please contact your PNC representative, and they will be happy to assist. We thank you.