In an unpredictable labor market, where job gains in January fell below expectations and the future remains uncertain, one thing is clear: Employers can’t afford to rest on their laurels. While the economy has remained relatively strong, shifts in the job market have been historically inevitable, and companies must constantly evaluate their operations to ensure they’re attracting and retaining the best talent.
One area that employers should pay close attention to: employee benefits. Surprisingly, small businesses—often perceived as lacking the resources to offer substantial perks—are quietly leading the charge in providing the kinds of benefits that employees value most. Small businesses are stepping up to meet workers’ needs, and it’s not just about flashy perks like wellness programs or flexible work arrangements. Traditional benefits, particularly retirement plans like 401(k)s, have emerged as crucial factors in attracting top talent and securing long-term employee satisfaction, according to Guideline research.
While it’s easy to focus on the more visible, short-term perks that have become synonymous with modern work culture, many employees are prioritizing long-term financial stability over immediate rewards. As workers grow older, their anxiety about financial security in retirement naturally may only increase. This economic uncertainty has become a driving factor in employee decision making. Our Guideline research shows that a stunning 93% of employees say that retirement benefits, such as a 401(k), influence their decision to join a company. More tellingly, half of employees surveyed said they would turn down a job offer from a company that did not offer a retirement benefit. For businesses, this shift in worker priorities presents a clear opportunity—and a possible call to action.
Small businesses are going the extra mile
Small businesses, often without the same resources as larger companies, have begun to recognize the growing importance of retirement benefits. In fact, the same research revealed that 70% of employers feel offering employees retirement benefits helped them with recruiting and hiring talent. And they’re not just offering 401(k) plans, but making them as impactful as possible. For example, nearly 80% of businesses that offer a 401(k) plan through Guideline provide employer matching. Our research shows that these contributions can increase employee participation in 401(k) plans by 9%, further cementing their value as part of an overall benefits strategy.
No matter the size of your business, it may not be enough to just offer the basics when it comes to employee benefits. Employers can help employees bridge the retirement savings gap. After all, the lack of access to retirement plans or the absence of a company match may disproportionately affect those who need help saving the most—especially in a climate where wages have stagnated for many workers. Providing access to a 401(k) plan and offering employer matching are key ways businesses can fulfill their role in helping employees plan for a comfortable retirement.
Small businesses are spurring the 401(k) boom
The numbers speak for themselves: over 15,000 businesses signed up for a Guideline 401(k) plan just last year. Of these new signed plans, 92% of them were customers who previously hadn’t offered a retirement saving option. This surge in interest signals a clear shift in mindset—a recognition that long-term financial security is just as important, if not more so, than the short-term perks that have become trendy. Small businesses are recognizing the changing needs of workers and stepping up to meet this demand. As more businesses recognize the impact of robust retirement benefits, it’s clear that this trend is more than just a passing phase—it’s a fundamental shift in how employers view their responsibilities to employees.
Workers today are no longer looking for a job that simply offers them a paycheck and a handful of perks. They’re looking for long-term stability and the opportunity to build a secure future for themselves and their families. To put this into perspective, last year, nearly 85% of employees who received access to retirement savings through Guideline participated in their plans, and on average, contributed close to 7% of their paycheck. Small businesses, by offering meaningful benefits like 401(k) plans with employer contributions, are not just meeting these demands—they’re helping to shape the future of employee benefits.
While large employers may have the resources to provide a broad array of perks, it’s the small businesses that are truly leading the charge in addressing the real concerns that employees have about their futures. This shift toward offering substantial retirement benefits isn’t just good for employees—it can be good for businesses as well. By helping to ensure their workers can retire with dignity and financial security, small businesses are investing in their most valuable asset: their people.
In today’s labor market, the companies that prioritize long-term stability and employee well-being can undoubtedly stand out. The time is now for businesses, large and small, to rethink how they approach employee benefits. It’s no longer enough to offer just the basics. Employees are looking for more, and small businesses are proving they have what it takes to deliver.
The Fast Company Impact Council is a private membership community of influential leaders, experts, executives, and entrepreneurs who share their insights with our audience. Members pay annual membership dues for access to peer learning and thought leadership opportunities, events and more.
Source link
