Written by: Dan Stevens, Financial Advisor at Burnham Gibson Wealth Advisors
The Great Resignation has affected companies all throughout the United States, and has been the result of a seismic shift in priorities within the labor market. While Covid has caused several changes within many firms, few businesses are truly conscious of the correlation between employee retention rate, and its contributing factors. Among the most talented Gen Y, millennial, and Gen Z prospects, values have shifted away from wages, and more toward benefits and flexibility. Setting aside independent contractors, this article will review exactly how companies can recruit and retain employees in order to remain competitive.
Because of the substantial turnover in the labor market and the altered priorities among job candidates, companies need to adjust to changing priorities to remain attractive. Therefore, they ought to consider factors such as benefits, retirement plan consulting, and mental health programs as part a comprehensive recruitment and retention package for their desired employees.
With inflation numbers nearing double digits, and the cost of household necessities like gas soaring, conventional wisdom suggests that young top talent would prioritize higher base pay, greater equity in the company, or more lucrative bonus structures. While obviously those are all important, it is clear that priorities have shifted. In fact, according to an Employment Confidence Survey done by Glassdoor, a staggering 80% of employees would choose additional benefits over a pay raise. Benefits, retirement, and flexibility are of greater importance as the spotlight on mental health has grown substantially stronger over the past several years. In other words, employees and candidates believe that health is wealth, so prudent employers need to respond accordingly.
According to an article by The HR Director magazine, author John Corrigan argues that “…offering an affordable, yet all-encompassing health insurance plan is the best way to recruit talent…” While there is nothing like a pandemic to remind folks about their family’s health insurance, other offerings like dental, life, disability, and more become attractive when competitors are offering similar or better packages.
Employers looking to redirect funding in an inflation-driven world might opt for a lower quality medical plan to save on premiums. This is an obvious way to cut cost, but the reality is that plans designed with increased deductibles and higher out of pocket maximums cause further financial distress on employees and their families. In a post-covid world, employees are looking for richer benefits that provide security for themselves and their family’s changing needs.
A BRP Benefits Consultant can work hand-in-hand with an HR team to curate a benefits plan that ideally suits the company’s unique needs. They will create a plan to strengthen the workforce by meshing the company’s needs and demographics with the most competitive plans available. In doing so, professionally tailored company benefits can recruit and retain elite prospects, perhaps better than anything else. In fact, according to Jobvite’s latest Recruiter Nation Report, over half of HR professionals and recruiters surveyed claim that corporate medical and dental coverage is the most attractive benefit for new prospects. This just edged out the corporate retirement plan, which was a closely-ranked second in the survey.
In today’s day and age, the labor market expects a retirement plan, such as a 401(k), as part of a benefits package. Simply having a plan available is no longer the value-add it once was. For example, offering a retirement plan through a payroll provider is a start, but offers little value via plan design, and therefore misses out on the ability to differentiate itself from competitors’ plans. Plan design refers to optimizing the structure of a retirement plan, and sets the parameters for how your and your employees’ retirement money is invested. Some examples of plan design include when employees can enter the plan, what match the company should use and when to offer it, how the vesting schedule works, weighing profit sharing and defined benefit options, and much more. Additionally, BRP’s Retirement Plan Consultants can benchmark the plan investments, the recordkeeper fees, and collaborate with third party administrators to potentially reduce multiple costs for participants. This adds tremendous value to the candidate or employee because they know their retirement is money well-saved, but also takes an enormous fiduciary load off of the finance team.
Financial wellness is another extremely valuable component to a retirement plan and to a firm’s benefits package. Employees have questions about how to make the plan work best for them and their families, yet often hit roadblocks when the provider cannot provide financial advice. In today’s unique economy, individuals and families are starving for financial security, especially regarding their own retirement planning. As part of BRP’s comprehensive retirement plan consulting, financial wellness can be offered as an additional benefit to interested executives and employees in need of financial planning.
When combined, a comprehensive benefits review along with proper retirement plan consulting can help create a formidable package that would be hard for any employee to leave, and hard for any desired candidate to turn down.
Because the main reason these benefits are so valuable to employees and candidates is that it helps them feel more secure, basic workplace policies aimed at mental health should ultimately be considered too. For example, a hybrid or “work from home” schedule is another large value add, particularly after Covid proved that many workers can be extremely efficient outside of the office. Candidates see this as a great way to maintain work-life balance, and therefore satisfies a need for mental stability. However, some employers tend to object, citing the need for a collaborative company culture. While well-intended, not only can it have the opposite effect, but being inflexible in today’s labor market can significantly ward off candidates. The balance and flexibility from a work from home option gives employees freedom, and often spurs additional creativity and energy too.
In the spirit of a work-life balance, prospective hires also see unlimited paid time off (PTO) as extremely valuable and an obvious mental health value-add. Believe it or not, this is even helpful for employers’ bottom lines. According to the Washington Post’s Jena McGregor, average vacation liability is roughly $2000 per employee, and that U.S. companies carried a jaw-dropping “$65.6 billion in accrued paid time-off costs forward on their books…” at the time of survey. Instead of having vacation days weigh down the company balance sheet, firms with an unlimited PTO policy have no such liability. In fact, there are multiple studies available that show that while job seekers tremendously value unlimited PTO, evidence shows that these employees tend to take less time off than those other under policies. This truly gives the employer a win-win, where it is cheaper to implement this policy, and it also helps recruit and retain top talent.
Businesses need to optimize their benefits, retirement plan, and culture in order to remain competitive in today’s labor market. With the turnover and changing priorities among job seekers, it is important for companies to remain flexible themselves. However, through no fault of their own, many business owners and HR teams are overworked, have little time to shop benefits packages, and tend to lack the professional expertise to construct the most competitive portfolio of options. The reality is that carefully composed healthcare benefits, retirement plan design, and ancillary mental health perks could mean landing the next great candidates, or retaining top performers. The return on investment in high-quality people is immense, and truly cannot be quantified. Contact a BRP advisor to discuss how to optimize your benefits offerings, get the most out of your team, and recruit and retain top talent.
 Jones, Kerry, Harvard Business Review: The Most Desirable Employee Benefits, 15 February, 2017. <https://hbr.org/2017/02/the-most-desirable-employee-benefits>
 Corrigan, John, HRD Magazine: Medical Coverage Is Job Seekers’ Top Priority, Say HR Pros. 19 January 2022. https://www.hcamag.com/us/specialization/benefits/medical-coverage-is-job-seekers-top-priority-say-hr-pros/322603
 McGregor, Jena, Washington Post: Why Unlimited Vacation Is Basically A No-Brainer For Employers, 8 October 2015, https://www.washingtonpost.com/news/on-leadership/wp/2015/10/08/what-your-company-gains-when-it-gives-you-unlimited-vacation/