The “Big Quit.” The “Great Resignation.” The “Great Reshuffle.” Whatever you call it, American workers are walking away from their jobs in record numbers. According to the U.S. Department of Labor, roughly 47 million Americans quit their jobs in 2021, and the trend isn’t slowing down.
One of the top ways companies attract and retain talent is by increasing wages. But in a tight labor market, a decent salary might not be enough. There is, however, one recruitment and retention tool that employers might be overlooking — the 401(k) plan or other retirement plans offered by the employer.
According to data from MetLife and the latest U.S. Chamber of Commerce Small Business Index, the labor shortage may be especially painful to small-business owners as almost half (46%) indicate they are facing a worker shortage. As a retirement plan specialist, you can be an ally to your small-business clients in the race for talent by talking to them about how adding or enhancing a retirement plan may help them better compete.
Make sure you are aligned with their objectives. Many plan sponsors may not focus on why they have originally offered a plan or its objective. They may consider a retirement plan as table stakes — a must-have to simply get in the game. But since they have already committed to the plan, make sure they understand and position it as a valued commodity that helps attract and retain workers. Helping plan sponsors see the value of the plan will help you deliver the best retirement solution.
With so many people leaving their jobs, plan sponsors need to up their recruiting game to fill vacancies. Fortunately, they can position their retirement benefits as a valuable recruitment and retention tool. Ask your clients to consider these facts:
Explain to your clients that offering a retirement plan shows they care about employees and their well-being and can help them stand out among employers, which can help with current recruitment and retention issues.
A strong retirement plan can also be a way to potentially safeguard against employees being recruited away by other companies. According to an October 2021 survey from the Society for Human Resources Management (SHRM), 41% of currently employed workers are actively searching or planning to search for a new job, and many cited better benefits among the top reasons. Clients should make sure their retirement plan is all it can be and that they are getting the most out of it.
Plan sponsors can get the most “bang for their buck” from their retirement plan by:
Boost the power of the retirement plan with some of these changes that may help attract and retain employees:
Auto-features can also help boost a retirement plan’s effectiveness. While many plans already have some in place, there are ways to help plan sponsors make better use of them.
The success of your client’s company is tied directly to the quality of its workforce. With record numbers of people leaving their jobs, now is a great time to talk to clients about reevaluating their retirement plan and using it as a recruitment and retention tool. A strong retirement plan, like a 401(k), is a great way for plan sponsors to show that they value their employees and for you to demonstrate yours.
* National Institute of Retirement Security, RETIREMENT INSECURITY 2021 - AMERICANS' VIEWS OF RETIREMENT, February 2021.
† BenefitsPRO, Employer-sponsored retirement plans: HR's new recruiting tool?, June 16, 2021.
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