Report: Are employers undervaluing 401(k) plans?

When it comes to keeping employees engaged, there are more options available today than ever before. From generous PTO policies to budgets dedicated to employee learning and development, many businesses are searching for fresh strategies to keep their teams happy and productive. But despite these efforts, the numbers don’t lie —  employee turnover is high, and managers are often left struggling to fill open positions.

We recently conducted a survey to better understand how both employers and employees value retirement benefits.¹ While employers and employees agree that retirement benefits are important, some companies underestimate their value. Our research shows that 93% of employees say that a retirement benefit influences their decision about whether to join a company. Yet, only 36% of employers rank retirement plans in their top 3 most valued workplace benefits by prospective employees.

A few key takeaways from our research include:

• One in two employees would turn down a job offer from a company that did not offer a retirement benefit.
• One-third of employees would be willing to trade in a lower salary for equivalent value in a retirement benefit.
• 70% of employers agree that offering a retirement benefit has positively impacted their ability to recruit and hire talent.

Below we’ll dive into the minds of both employees and employers to better understand the value of 401(k)s in today's workforce.

Are you ready to give your team the benefit they deserve? Our low-cost, highly automated 401(k) plans make it easy for companies to offer a valuable retirement benefit, and easier than ever for people to invest in their financial future. Get started today.

Disclaimers:

This information is general in nature and is for informational purposes only. It shouldn’t be used as a substitute for specific tax, legal and/or financial advice that considers all relevant facts and circumstances. Investing involves risk and investments may lose value. Tax laws and regulations are complex and subject to change. You should consult a qualified financial adviser or tax professional before relying on this information.

¹ Source: Guideline research run with Suzy. Insights based on data collected from December 2023 to February 2024 with 150 US-based employers and 1038 US-based employees, ages 18-75.  Guideline was not identified as the survey sponsor. The experiences of the respondents in this survey may not be representative of all people.

² Source: Gallup, This Fixable Problem Costs U.S. Businesses $1 Trillion, 2019

³ Source: Guideline research run with Suzy. Insights based on data collected February 2024, from a survey of 350 US-based employers who do not offer a retirement benefit. Guideline was not identified as the survey sponsor. The experiences of the respondents in this survey may not be representative of all people.

⁴ This content is for informational purposes only and is not intended to be taken as tax advice. Please consult a tax professional to determine what types of tax credits or deductions your company is eligible to claim.

⁵ Source: Guideline research run with Suzy. Insights based on data collected February 2024, from a survey of 422 US-based employers who do not offer a retirement benefit. Guideline was not identified as the survey sponsor. The experiences of the respondents in this survey may not be representative of all people.