Think twice before retooling this benefit
April 16, 2009 by Sam NarisiPosted in: Attracting talent, In This Week's E-Newsletter, Latest News & Views, Retention
The 401(k) match is a great, cost-effective recruiting and retention tool — but several high-profile companies have made headlines by suspending or reducing the benefit.
The goods news: Few small or mid-sized companies are following suit.
Only 3% of employers plan on eliminating their 401(k) match this year, according to a recent survey by WorldatWork. Almost three quarters (74%) plan on keeping things the same, while 8% will likely decrease the match and 15% will actually increase it.
What it means to HR: Companies thinking about retooling retirement benefits to cut costs may want to reconsider — it may result in a big staffing disadvantage compared to competitors who keep their plans the same.
April 17th, 2009 at 12:41 pm
They seem to have missed our client employers in this survey, as our match ratios are down 25% to 30%. However, I agree with the article – if you can afford to continue matching, it is really appreciated by employees who understand the benefit. AS always, though, communicating that you are keeping this benefit alive, while others are eliminating it is key!
April 20th, 2009 at 2:11 pm
Our company eliminated the 401k contribution this year.
Bad economy is the reason given in the memo, but that is hard to swallow when the company has spent an untold amount of money on new technology and other business innovations.