Fewer employers are offering generous 401(k) matches and flexible work arrangements this year, according to new SHRM research—a shift that could have consequences for hiring and retention even as companies look to cut costs.
A recent Employee Benefit News article breaks down the findings from SHRM’s 2026 Employee Benefits Survey. The share of employers offering a match on traditional 401(k) plans fell to 81%, down from 85% last year. The average maximum match eased to 6.1% from 6.3%, and Roth 401(k) matches also edged down to 5.9% from 6.1%. Support for retirement planning education slipped too, dropping to 46%, down three percentage points from the prior year.
Workplace flexibility is softening as well. Flextime during core business hours declined by six percentage points, while hybrid work declined by three percentage points.
Ted Kezios, senior vice president of people care at Cisco who was quoted in the Employee Benefit News article, said that while these cuts can help businesses save money in the short term, they can also create uncertainty for employees—and damage the employer’s brand over time.
“Reducing benefits such as parental leave or caregiver support programs, for instance, can make it more difficult for employees to balance major life changes with their professional responsibilities during already challenging periods,” Mr. Kezios explained. “Over the longer term, benefits can influence organizational culture, the ability to attract talent, and by extension, the employer’s brand.”
Cisco is taking a different approach. The company has continued to invest in benefits, including 16 weeks of parental leave in the U.S. (up from 12 weeks in 2024), 10 company-paid volunteer days, generous fertility benefits, and robust well-being programs. It’s also investing in learning and development, particularly around AI skills—programs like Time2Grow block four hours each month for employees to focus on skill-building.
Mr. Kezios noted that Cisco’s internal research consistently shows that benefits and perks rank among the top reasons candidates are attracted to the company. That holds true even in a tighter labor market.
“What we continue to hear from candidates is that strong benefits support holistic wellbeing, long-term security and opportunities for growth,” he said. “Whether it’s support for major life moments like parental leave and caregiving or access to learning and development opportunities in areas like AI, these offerings remain a key part of how candidates assess employers today.”
On the question of whether this is a temporary pullback or a longer-term shift, Mr. Kezios said employee expectations around well-being, flexibility, and career development are likely to remain central to how people evaluate employers, especially as AI continues to reshape the workplace.
“At the end of the day, strong benefits build stronger organizations that can weather the ever-evolving AI era,” he said, “especially in supporting employees to thrive.”
Not every employer can match Cisco’s investment in benefits. But before pulling back, it’s worth asking what employees actually value—and whether the short-term savings outweigh the longer-term costs in recruiting, retention, and culture. For employers who aren’t expanding their offerings, there’s still a lesson here: make sure employees understand the value of the benefits you do provide.
