Close the Professional Services Hiring Gap with 401(k) Benefits
posted by Fisher 401(k) July 31, 2018
Employers in the professional services field can be very different from one another—accounting firms, law offices, design consultants, and marketing agencies, for example—but they all have one thing in common: When businesses of any kind grow, they call upon professional services companies to help.
In 2018, the professional services industry is projecting high rates of both job openings and new hires. And they face unique hiring challenges. With that in mind, now is a great time for employers in the industry to consider how best to rise to the challenge of hiring the right people for the right jobs. Here’s a look at the current state of professional services in the U.S., the projected growth lying ahead in coming years, the industry’s tight job market, and how 401(k) benefits can play a key role in growth strategies for professional services firms.
Reasons for Tight Job Market in Professional Services: Evolving Tech and Low Unemployment
In 2017, the professional services industry boasted a job opening rate of 5.2%, which is one of the highest individual industry numbers in the country.1 That said, while high, the industry’s hire rate has capped at 5%.2 This indicates a tight job market for employers, who aren’t able to fill all of their open positions.
Over the past several years, the professional services industry has faced an evolution in the role technology plays in businesses of all sizes. Advanced cloud technology is making it easier for professional services companies to replace low-level employees when it comes to basic activities like research and data analysis.3 This represents a shift in the way professional services employers think about hiring, as highly skilled professionals are becoming even more important in the creation and support of software tools—skilled professionals which are becoming harder for employers to find.4 Combine that shift with a nationwide unemployment rate hovering around 4%, and professional services employers are faced with a real challenge to stand out from their competitors and attract the right person for their open positions.5
Closing the Professional Services Hiring Gap with Attractive 401(k) Benefits
With low unemployment rates, professional services employers looking to attract qualified employees away from the competition will need to utilize every tool at their disposal. All benefits, including a 401(k), can often make up over 30% of an employee’s total compensation, and the quality of those benefits can make all the difference when a candidate makes their ultimate choice of employer.6
This presents professional services employers with an opportunity to upgrade their 401(k) offering using features that will be attractive to prospective hires. If you are concerned about securing the employees you need to grow, consider the following 401(k) tactics:
1. Competitive employer match: Some employers choose to match employee contributions to a 401(k) at different rates, and up to different amounts, in what’s called an employer match. Large employers like Microsoft have embraced their employer match’s power to both improve retirement readiness among their employee base, and also to attract top employees.7 Consider adding an employer match to your 401(k), or adjusting your match rate, to compete with other employers and take your plan to the next level.
2. Alternative vesting schedules: For those companies who do offer an employer match or profit sharing contribution as part of their 401(k), a vesting schedule determines at what point employees own 100% of the dollars contributed by the employer. Depending on the goals of the business, a vesting schedule can be shortened or lengthened to meet different business goals. For example, a shorter vesting schedule can be attractive to employees if hiring is a challenge, while a longer vesting schedule could help defray costs if high turnover rates are a concern.
3. Support for different kinds of investors: In our own poll of American small business employees, we found that 77% would prefer to work for an employer who offers plenty of 401(k) support.8 Consider partnering with a specialized business 401(k) adviser who will offer your employees a wide range of investment styles for employees with different experience levels. Additionally, one-on-one access to retirement experts can give employees the help they need to review their unique goals for retirement and align their 401(k) strategy accordingly.
For a broader look at employment trends around the country, including additional insight into utilizing your company’s 401(k) benefits to attract and retain key employees, download our 2018 Job Market Report.
1 Bureau of Labor Statistics
2 Bureau of Labor Statistics
8 Fisher Investments 401(k) in the Workplace Quiz, October 2016