Better retirement benefits drive retention

The ‘Great Resignation’ is forcing employers to rethink how they attract and retain employees.

While many organizations have focused on raising pay and introducing hiring bonuses, a more sustainable approach is to switch up their benefits offerings. But which benefits should employers focus on?

A study of almost 10,000 US employees by WTW (formerly Willis Towers Watson) found that retirement benefits were the key to successful talent attraction and retention. This makes it clear that the ‘Great Resignation’ is not a spur of the moment decision; instead, employees are looking for long-term financial security, and for employers to play a role.

47% of the respondents told WTW retirement offerings were why they joined an employer, while 60% cited pension benefits as the main reason why they would stay in their job.

In fact, 44% said retirement was the most important benefit to them.

Further to this, 63% told WTW they would pay more out of their salary each month for a guaranteed benefit in retirement (aka a set amount of pension they will get when they retire), while 59% would do the same for a more generous pension pot.

Beyond pensions

The second most important benefit to US workers is flexible work; 39% ranked this as the most important. 50% of these workers said they wanted more generous paid time off and sick leave policies, 47% wanted the option to work from anywhere, 45% wanted to choose when they worked and 35% wanted clear boundaries between work

This makes sense given that flexible work has been found to be a leading cause of the ‘Great Resignation’ by multiple studies, including from HiBob and Topia.

Coming in third place was better healthcare benefits; 33% ranked this as their top benefit.

46% of all respondents told WTW they would be willing to lose pay for a more generous healthcare plan, while 48% said the same for lower, more predictable healthcare expenses.

Next came mental wellbeing; 28% ranked this as their top benefit. 53% of those respondents wanted mental health days, 40% wanted stress and resilience management support and 39% wanted more generous mental health provisions.

This fits with research that found stress and burnout are leading causes of the ‘Great Resignation’; employers are struggling with switching off from work and need their employers to support them in managing their stress.

Talking about the findings, WTW senior director of retirement Monica Martin commented:

“While employees still look at pay as the most compelling reason to stay or leave a company, health and retirement benefits have become a much more significant factor in their decision-making process.

“In this tight labor market, organizations that understand the importance that employees place on these core benefits and that provide highly valued benefit programs can differentiate themselves in their effort to become an employer of choice.”