JGI/Jamie Grill
Companies like Google and Uber have told employees they can work remotely through 2021, and as more corporations embrace the work from home lifestyle accelerated by the global pandemic, quirky office perks no longer seem fashionable. Many will have to increase or alter their benefits packages in order to attract, and retain, top talent.
A Glassdoor survey revealed that four in five employees would prefer new or additional benefits over a pay raise. More specifically, 89% of younger employees, those between 18 and 34, would prefer benefits to more money in their paycheck.
While increased health-care insurance was the most valued benefit (40%), retirement plan and/or pension ranked fifth, at 31%. Flexible scheduling — which has become the norm for many in the current work from home environment — followed retirement savings, at 30%.
A company’s success can be tied directly to the quality of its employees. While ping pong tables collect dust in empty offices, firms need to show employees that they are invested in them. “Employees who feel their employer is invested in them are more likely to be engaged in their workplace and stay with the company longer, reducing the high cost of employee turnover,” Roger Lee, the CEO of Human Interest, a San Francisco-based 401(k) provider, recently wrote.
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Focus on retirement benefits isn’t new, or only for employees at large corporations. A study conducted by Environics Research Group in 2012 found that 92% of employees at small- to mid-sized companies ranked “workplace savings and retirement plans” as an important factor in remaining with their employer.
Not only do retirement plans make companies more appealing to applicants, but they can also improve the morale of current staffers. According to a survey by Willis Tower Watson, 75% of new hires at a company offering a 401(k) say that a retirement plan provides a compelling reason to stay. Office perks, promotions, and raises may benefit some, but a company retirement plan may be a more equitable solution for the whole company.
Simply offering a retirement plan will not be enough, according to Lee. He argues that retirement plans, specifically 401(k)s, should offer immediate eligibility, lost-cost options, and employer match or contributions. Immediate enrollment would allow employees to contribute right away, instead of having to wait, receiving the full value of their benefit. Low fees would allow employees to keep more of their earnings.
A National Compensation Survey found 41% of employers match a percentage of employee contributions, with the top-end of the range at 6%. According to the Bureau of Labor Statistics, the average 401(k) match is 3.5%.
