There’s been a lot of talk about how today’s candidates are only focused on their base pay. While base pay is a primary concern of the executive and professional-level talent we recruit—and for a good reason—it isn’t the only negotiating point on the table.
We’ve heard from many candidates who are focused on saving their money. As a result, negotiations around their 401(k) have become increasingly critical. It’s not hard to imagine why since many workers’ savings accounts were negatively affected during some recent market volatility.
In an effort to maximize their savings, candidates are looking for employers who will more competitively match their 401(k). As a result, almost all candidates want to know what the average 401(k) match looks like in our industry and what employers are willing to offer.
Are you competitive in your 401(k) matching? Then, let’s dive in and learn more about this critical component of your job offers.
The (Recent) Rise of the 401(k) Match
Just five years ago or so, it was common for almost all companies to have a standard 3% 401(k) match. Or they would do a 50% match up to 6% of the employee’s contribution (which is just a fancier way to say they’ll chip in 3%).
Many companies have found that upping their 401(k) match has built more loyalty with employees and perhaps even their spouses, who are often deciding factors in whether a person makes a career change or not.
The increased attention to an employer’s 401(k) match is a relatively recent phenomenon. Not long ago, 401(k) matches weren’t widely offered. They were a perk. But nowadays, they’ve evolved into a “must.”
What’s the Norm in the Ag Industry Today?
In a recent poll, we asked the Ag community what they were making for their 401(k) match. Here are our findings:
- 14% of those employed were offered either no 401(k) match or no retirement of any kind
- 19% of those who responded stated that their employer matched in the range of 1-3%
- That means 67% of those who responded now earn more in 401(k) matches than what the norm was just a few years ago
- 50% are in the 4-6% range, but almost as many are in the 7% or more.
In these changing times, offering the best benefits will improve your employer value proposition and give you a leg up as prospective candidates consider joining your organization.
Times Are Changing, Are You Keeping Up?
The need for a higher percent match is a resulting characteristic of the current candidate-driven market. Whatever the cause, the increased focus on the 401(k) proves it’s not all about base pay, and in many cases, it’s equally as important as base pay.
Whenever our candidates receive a job offer that lacks information about these benefits, we go back and ask for the specifics, which adds an extra step (and possibly unnecessary friction) in the negotiating process.
Benefits add up, and it’s not just 401(k). Knowing your health insurance plans and how they compare, helping candidates make sense of vehicle policies (if any), and including clear and detailed information about any other benefits will help your candidate feel more confident about your organization and your employer value proposition.
A Better 401(k) Match Improves Hiring and Retention
We know what you are up against when hiring top talent today. When considering finding and retaining the best talent in the industry, we can inform your benefits offering. And for prospective hires, we can sell them on why your benefits are the best in the industry.
If you need an advocate who can leverage your competitive 401(k) match to help you hire the executive and professional talent you need, contact Ag1 Source today.