Aligning Retention Strategies with Talent Needs
In this highly competitive labor market, it’s crucial that employers implement strategies that not only focus on retaining talent but also align with the needs and expectations of the talent they are trying to attract. By understanding what motivates and appeals to potential candidates, companies can tailor their approaches to ensure they are not only retaining their current workforce but also attracting the right individuals who will thrive within the organization. This includes offering competitive benefits, creating a positive workplace culture, and providing opportunities for professional growth that resonate with both existing employees and prospective hires.
A key example of this approach is the structuring of vesting periods for retirement plans. While traditional six-year vesting schedules might have been the norm, they may no longer resonate with today’s workforce, particularly younger employees who may not see themselves staying with one employer for that length of time. By offering shorter vesting periods, such as three years, employers can make their retirement plans more appealing to both current and prospective employees. This adjustment not only demonstrates a commitment to the financial well-being of employees early in their careers but also serves as a powerful incentive for attracting talent that values flexibility and immediate benefits. This strategy shows potential hires that the company understands and values their need for more immediate returns on their contributions, making the organization more attractive in a competitive market.
Following the conclusion of a TPSU program held on the campus of Rutgers University, Fred Barstein, CEO and founder of TPSU and 401kTV, interviewed Lisa, who oversees HR for a credit union with 160 employees. Lisa explained that her credit union had recently lowered its vesting period from six years to three years in 2024. The motivation behind this change was to increase employee enrollment and participation in their 401(k) plan, particularly because many of their entry-level employees might not anticipate staying with the company for six years, which could discourage them from participating in the plan. When asked if the employees appreciated the change, Lisa mentioned that there had been a slight increase in participation. While employees might not fully grasp the implications of the vesting change, it had helped reduce a barrier to participation by offering a more comfortable three-year vesting period.
Read the Full Transcript Here:
Fred Barstein:
Greetings. This is Fred Barstein, CEO and founder of TPSU and 401kTV, here on the main campus of Rutgers in New Brunswick, New Jersey, where we just completed a very successful TPSU program. I’m here with Lisa.
Lisa:
Hi.
Fred Barstein:
Welcome, Lisa.
Lisa:
Thank you.
Fred Barstein:
Okay if we ask you a few questions?
Lisa:
Yeah, absolutely.
Fred Barstein:
Before we do, tell us a little bit about yourself, how many employees, what your role is.
Lisa:
Sure. I’m Lisa. I’m the Chief Human Resources Officer for Credit Union, and we are 160 employees, growing every day.
Fred Barstein:
Great. So in the program today, you talked about how you changed your vesting. Tell us about why you did it, what it was, and what’s the effect then?
Lisa:
Sure. So we are really targeting getting more enrollment, having a higher participation rate for our employees, and we previously had a six-year vest, which we lowered in 2024 to a three-year vest.
The reason for that, we really wanted to get employees more excited about enrolling, increased participation, and we find that at a credit union, we have a lot of entry-level folks that are coming in, that may not think that they’ll be with us for six years, and that could prevent them. We sure hope that they are, but we really want to encourage everybody to participate in their 401(k) early and as much as they possibly can.
Fred Barstein:
And do the employees appreciate the change?
Lisa:
You know, we have seen a bit of an increase in participation. I don’t know if employees really kind of think through as much what that looks like, but I do think it prevents some of the barrier for them participating. Not knowing if they’re going to be with us in six years or so, that three years feels a little bit more comfortable to them.
Fred Barstein:
Final question, a couple of things you learned today and do you think this is be worthwhile for people to attend?
Lisa:
Yeah, absolutely. So we partner with HFM as an advisor, who was one of the speakers today, and so that’s how we were invited to participate. So we have really great partnerships in them helping us to kind of think about our plan and think about how it’s structured, for sure.
But this was a great session and kind of thinking about some of the SECURE Act provisions and some things that are coming up, especially related to you offering student loan repayments and some of those pieces.
Fred Barstein:
Great. Well, thank you for participating.
Lisa:
Thank you.
Fred Barstein:
And thank you for watching 401kTV. Please stay tuned for more programs like this.
