As a business owner, one of your most challenging jobs is attracting and securing top talent. The U.S. employment rate is projected to remain below pre-pandemic levels for the next ten years leaving well-qualified individuals actively job hunting. Safety and financial security are top-of-mind, and so, candidates will be searching for opportunities that match their goals. That’s where your 401(k) plan comes in. 

Why Benefits Matter More Than Ever

Employees want lasting benefits. Therefore, higher salaries and pay raises aren’t the only incentive you can provide. According to a recent Glassdoor survey, 57% of job candidates say benefits are a driving force in accepting a job offer. When you break down that number by age group, 90% of millennials prefer benefits over pay. According to the same survey, 401(k) plans rank equally with vacation/paid time off and pension plans on a scale of 1-5.

Top 5 Benefits by Correlation of Overall Satisfaction with Benefit Packages

Source: Glassdoor

Given this intelligence, it’s essential to actively market your 401(k) plan and the benefits it can provide so employees can make informed decisions about their future. Four things to consider when designing your plan are as follows:

1. Eligibility: Enrollment is highest when an employee first joins a company. Consider making all employees immediate eligible so they can start reaping the benefits of their 401(k) plan right away. 
2. Employer Matching: Employer matching demonstrates your commitment to their future by increasing their retirement savings through tax-deferred income. According to Fidelity, the average employer contribution is approximately $4,000. On average, this combined with employee contributions amounts to 13.5% of their annual income. Research your match % against other plans and your industry to determine if your plan is competitive.  
3. Vesting: You may not want to invest in short-term employees, but the shorter the vesting period, the more attractive your total compensation package will be. Consider offering immediate vesting or allowing specific contributions to be fully vested as soon as the employee starts a job instead of making them wait. 
4. Low Expense Ratios: The fees passed on to your employees eat away at their retirement savings. Large companies with huge portfolios typically have lower costs, so it may be hard to compete, but lean on your TPA to help negotiate. You want to be able to show that your 401(k) plan can boost long-term security.
5. Teamwork: HIre the right team of people to ensure your 401(k) portfolio performs well for your employees. Leverage the expertise of your financial advisor, TPA, record keeper, and 401(k) auditor. Learn more about how the team can help build a healthy 401(k) plan here. 

As a small business, you may need additional leverage to attract and retain stellar employees. Offering a 401(k) plan sends a clear signal to your current and prospective staff that you value them for the long haul. But it’s not enough to just offer a 401(k) plan. You have to make sure that plan delivers. Take stock in how your benefits stack up next to the competition and design a plan that serves as a recruitment gamechanger.