Recruiting talent using pensions and benefits

When it comes to choosing a retirement program to attract talent, he outlined the different options that are the most attractive to different generations in the workforce.

Defined benefit plans match up well with the pre-boomers and boomers, given their age and length of time until retirement. Capital accumulation plans are more appealing to generations X and Y, while hybrid plans have the potential—if constructed properly—to appeal to a wider audience, from generation Y to boomers.

Sohairtz said there are a couple of directions where he thinks retirement programs should go. For instance, a hybrid pension plan can be a one-size-fits-all solution that meets the “cash is king” philosophy that seems to fit with generation Y and the defined pension promise of the mid-career or longer-service employee of the future.

Another option would be a defined contribution (DC) plan with a plan sponsor trust fund and annuities provided by the plan sponsor. If DC is the preferable option for its cost certainty and no volatility features, he added that the recent market experience and reminders about many and/or most individuals being ill-equipped to take on the responsibility to make investment decisions for themselves would make a case for this kind of plan.

“If your retirement programs are constructed to provide portability [and] some employee control, and are relatively easy to communicate and understand,” Sohairtz explained, “then we feel that your retirement program will do the job that you need to keep you competitive and to attract talent.”

Defining and differentiating the benefits program from your competitors is another way to set your company apart, said Michele Bossi, a health and welfare practice leader with Buck.

From a recruiting standpoint, totally insured benefits programs are more attractive to high users, and covering non-catastrophic items under an insurance arrangement encourages spending on non-medically necessary items.

In general, there has been a shift away from treatment that is medically necessary for illness and injury to include treatments that enhance lifestyle, reduce stress, provide comfort, or are primarily preventive in nature (such as massage therapy).

“This has resulted in a shift in employees’ perception of benefits,” she explained. “It is no longer thought of as security in the event of illness but as a perk or entitlement.”

For a benefits plan to meet the needs of more employees, Bossi suggested employers could provide additional options for catastrophic insurance; allow those who want to spend it on healthcare to put it in a health care spending account; offer critical illness coverage for those concerned about their long-term health; and allow the purchase of fitness memberships, vacation time or education.

Wellness programs are also attractive to new hires, but in order for these to be successful, employers need to practice what they preach.

For instance, promoting work/life balance is not just about creating supportive policies, it’s about instilling the supportive attitude into your culture. “If employees don’t experience work/life balance, the policies are meaningless and while you may be able to attract employees with the promise of balance, you won’t retain them when they realize that you lied,” she said.

Still, the war is not lost. By creating pension and benefits plans that cater to different generations’ needs and wants, plan sponsors can emerge from battle victorious.

To comment on this story, email craig.sebastiano@rci.rogers.com.