As employers look for ways to attract and retain the most qualified candidates, employee benefits are becoming more critical to securing top talent who play important roles in their organization1. According to the U.S. Bureau of Labor Statistics, employees change jobs for better pay, improved benefits, opportunities for growth, or a different career altogether. New research conducted by Principal Financial Group® indicates that nonqualified deferred compensation (NQDC) plans – employer-sponsored plans that enable key employees to save more of their earnings for retirement – remain valuable in helping employers recruit and retain key talent, and important in helping participants reach retirement savings goals.
There’s no shortage of openings for employees to consider as there are now 1.9 job openings for every unemployed worker2. In fact, employers (88%) and employees (91%) agree that most key employees are actively looking for a new job, according to the Principal research. While employers say they’re increasing pay to help retain existing key talent, employees state employers could do more.
“Labor has been incredibly mobile this year, as employees have changed jobs or career paths in search of better pay, benefits, and growth opportunities. Our research clearly indicates that a non-qualified deferred compensation plan serves as a valuable benefit to the retention of key employees, and attractive to prospective candidates,” said Nate Schelhaas, senior vice president and head of life protection solutions at Principal®.
Some of the key takeaways for plan participants include:
- For participants, NQDC plan availability plays an important role in the decision to stay with an employer (53%) or take a new job (60%)
- Eight in ten participants say a NQDC plan is important in reaching their retirement goals
- Of the 27% of participants with a NQDC match from their employer, nearly all (93%) contribute enough to get the maximum match
From a plan sponsor point of view:
- The top two reasons plan sponsors provide NQDC plans is to provide a competitive benefits package (89%) and to help participants save for retirement (88%)
- 59% of plan sponsors are concerned with attracting key employees, and 55% are concerned about losing key employees to competitors
- The majority say offering a NQDC plan is valuable for recruiting (59%), and retention (66%)
To see more survey results, view the summary of 2022 key research findings (PDF).