Survey says: retirement plans and employee benefits are key to retention
Want to boost staff morale? Take a look at your retirement plan and benefits. Presented by Chase for Business.
Finding good employees can be a monumental challenge for small business owners, making it all the more important to keep the ones you have.
In January of 2024, J.P. Morgan surveyed 1,503 retirement plan participants to get a sense of how they feel about their employer’s retirement offerings. The study complements a 2023 survey (PDF) on the same subject of 788 employers who were offering a retirement plan. Taken together, the survey results shed light on the relationship between benefits and employee retention. Here are some key takeaways:
Nearly 9 out of 10 workers say they look at benefits when applying for jobs
Eighty-five percent of employees surveyed said that retirement benefits are an important factor when deciding to stay with their current employer or consider looking for a new job. This means that, if you’re worried about staff turnover, you may want to take a closer look at your retirement and benefits package and compare it with what other similarly sized companies in your industry offer.
Most employers aim for breadth as well as depth in benefit offerings
All the employers who took part in the 2023 survey reported offering their employees defined contribution plans (doing so was a requirement to participate in the survey). But the vast majority didn’t stop there. 98% also offered health insurance, while more than half offered life insurance, disability insurance, mental health benefits and health savings accounts.
Why? For one thing, many of these employers noted that they feel like they owe it to their employees to provide retirement support and other benefits. For another, many also believe that these offerings are crucial to attracting and retaining talent.
They’re likely right. Seventy-four percent of employees believe that their employer has a responsibility to help them save for retirement, and 65% believe their employers should help contribute to their overall sense of financial wellness by addressing topics such as budgeting, debt and education savings strategies. Younger generations, in particular, are likely to feel this way. Around 6 in 10 Gen Zers and Millennials say it is important to offer financial wellness programs, compared with only 4 in 10 Gen Xers and Boomers.
Mental wellness is important too
In the wake of the pandemic and the “great resignation” that followed it, many employees are interested in holistic wellness plans that include mental as well as physical health components. In fact, 6 in 10 employers believe that access to mental health benefits can help improve financial wellness. Perhaps this is why 67% of large plan sponsors with over $250 million in assets under management (AUM) and 59% with an AUM below that now offer mental health resources.
More than half of the surveyed employers also offer health savings accounts, which allow employees to set aside pre-tax income for mental health services or other wellness expenses and can be a key component of a flexible, holistic benefits plan.
Employees want their employer to lead
In the past, many employers assumed that their employees would prefer to take a self-directed approach to their retirement contributions and handle them entirely on their own. However, survey results indicate that most employees would like to be able to lean on their employer for help planning out their retirement savings. Specifically, two-thirds believe their employer should provide a viewpoint on how much they should contribute to the plan.
What does this mean for you as an employer offering a retirement plan? When choosing plan offerings, you may want to focus on options that offer investment defaults into target date funds or other professionally managed asset allocation strategies. Odds are good that your employees will appreciate feeling like they’ve got the support of someone they can trust as they plan their retirement contributions.
Some employers are thinking beyond retirement
A resounding 80% of employees say that they would likely leave their balances in their employer-sponsored plans after retirement if they could generate monthly income that way.
Some employers are taking note and have been adding post-retirement offerings to their plans. Those offerings can take many different forms, from simple educational webinars to products that help participants decumulate their savings. Some are also incorporating annuity options.
If you’re looking for another way to attract or retain talent, consider expanding your plan offerings to include post-retirement options.
Take the next step
Now more than ever, business owners must differentiate themselves from their competitors to find and retain top talent. Employee retirement plans like Everyday 401(k) and other benefits can help you do exactly that.
Ready to learn more? Speak with your Chase business banker or your Chase Wealth Advisor about setting up a plan that works for you and your employees or click here and complete our short form and a Retirement Plan Specialist will reach out to you.
