RICHMOND, Va. -- Four and a half million American workers voluntarily left their jobs in November, the highest number on record.
It may seem contradictory in an economy whipsawed by two years of the pandemic, but that movement presents an opportunity for employees looking for better wages and employers trying to keep the people they have.
It’s being called ‘The Great Resignation,’ and it’s something Sandy Wiggins, president of ACG Wealth Management, has been watching closely.
“Virtually every segment of the job market has been impacted by this,” said Wiggins. “The reasons employees are leaving the workforce or changing jobs include generous government benefits, as well as the demands of home life as a result of the pandemic. The stress of school closings, the isolation of remote working, and the need for increased compensation as a result of inflation are contributing factors as well.”
Wiggins points out that companies are well aware that losing even a single employee can be costly.
“It's estimated that losing an employee can cost a company up to two times the employee's salary,” Wiggins said. “Whether it is not feeling fairly compensated, or having too much debt, ‘personal financial matters’ is ranked as a leading cause of employee stress in the country.”
Wiggins, whose firm helps companies manage their benefits, says that one way companies can remain competitive beyond simply increasing wages is by enhancing their 401(k) benefits program.
“We saw more companies adding a 401(k) plan to their benefit or enhancing their existing plan than in other years,” said Wiggins. “And this includes industries that typically haven’t embraced retirement plans in the past, industries like higher-end restaurant chains, hospitality, manufacturing, and construction.”
He says companies can get creative with structuring their benefits.
“Allow immediate participation in the 401(k) program,” said Wiggins. “This allows employees to begin saving, and potentially receiving company contributions, right away. They can also increase their contributions. This is similar to offering higher compensation, but companies can also have a vesting schedule to keep employees around in order for them to access the company contributions. Finally, they should consider automatically enroll employees into the plan, making it easier for employees to start saving, say 3% of their salary and enjoy company contributions.”