Now more than ever, employees are leaving their current jobs for greener pastures. If you're not offering a retirement plan, you're missing out on a valuable retention strategy.
Employees all over the country are exploring their career options. In fact, 65% are considering calling it quits with their current employer, according to a 2021 PwC survey. In today's job market, workers are looking for new opportunities, and a top driver of the mass exodus is a stronger benefits package.
As a result, employers are increasingly leveraging benefits as part of their employee retention strategies. If your business is challenged by attracting and keeping top talent, you may want to take a look at your organization's retirement plan — or lack thereof.
Experts agree that financial stress can impact productivity, engagement and employee retention. A retirement plan shows employees that you're being proactive in prioritizing their retirement savings and preparing them for the future.
Helping workers save for the years ahead can also give your organization a competitive edge when it comes to attracting top talent — and keeping employees engaged.
State-mandated plans: Creating a path to retirement for more employees
A growing number of workers struggle to save for retirement, especially employees at small-to-medium-sized businesses. One in four Americans has no retirement savings, and those who are saving aren't saving enough, a PwC survey found.
For employees without access to an employer-sponsored plan, certain states have passed legislation requiring organizations to adopt state retirement savings plans. To date, we've found that more than 30 states have contemplated enacting state-mandated retirement plan legislation, while 13 have actually signed such programs into law.
These state-mandated retirement plans offer employers an affordable solution with fewer fiduciary responsibilities, but somewhat less control for employers and plan participants. Find out how ADP can help.
Company-sponsored plans: Employee retirement benefits on your terms … and theirs
Company-sponsored plans are another option to encourage savings and employee retention. They generally offer employees more power over their investment decisions, and a wider range of investment options at varying levels of risk and savings potential.
Employers can contribute by matching employees' contributions up to a certain amount — an added benefit to increase their savings. There are also tax savings opportunities for employers that offer a company match to plan participants, as contributions are tax-deductible up to applicable IRS limits.
Weighing the retirement plan possibilities
Not offering a retirement plan yet? You can choose between a state-sponsored plan and creating one of your own as part of an effective employee retention strategy.
There are several retirement savings options for your business, depending on your employees' needs, the size of your organization and more. Be sure to explore the plans available to you, so you don't miss out on the valuable recruitment and retention benefits of creating a more financially sound retirement for your employees.
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ADP, Inc., and its affiliates do not offer investment, tax, or legal advice to individuals. Nothing contained in this article is intended to be, nor should be construed as, particularized advice or a recommendation or suggestion that you take or not take a particular action. Questions about how laws, regulations, guidance, your plan's provisions, or services available to participants may apply to you should be directed to your plan administrator or legal, tax or financial advisor.