In the latter half of 2021, a trend of mass-resignation in the workforce has been the subject of numerous viral posts, and this widespread messaging has become a source of worry for employers as resignations continue to increase. Seemingly every day, another job-walkout post goes viral, typically featuring a screenshot of a tense text message exchange between an employee and their supervisor, followed by a final, often cathartic, message: “I quit.” The appeal of these posts is clear; workers who are frustrated by long hours, stagnant wages, hazardous conditions, and increased workplace stress see others deciding not to tolerate it anymore, and a domino effect begins. It may be easy to dismiss these viral posts as anomalous, or even to question the authenticity of many of them, but the statistics regarding employee turnover for late 2021 paint a grim picture.
In fact, in August of 2021, a record high 4.3 million workers in the United States quit their jobs. In the 21 years since the U.S. Bureau of Labor Statistics began tracking turnover rates in their JOLTS report, the phenomenon known as the “Great Resignation” represents the highest number of employee walkouts and resignations ever in a single month. Despite the overall instability of the global economy and the uncertainty facing many newly-unemployed members of the labor market, workers are planning to continue their mass exodus, with over 15% of the workforce in a recent survey stating that they plan to quit their jobs by the end of 2022.
Onboarding new employees can cost between 16% and 213% of a worker’s annual salary, depending on their position. Most businesses simply cannot afford to keep cycling through staff. Hiring costs, as well as the productivity costs involved with training and onboarding new employees, may be enough to hurt a lot more business’s bottom lines if turnover rates remain this high. It’s clear that employers are going to need to change tactics to entice new employees and retain their workforce.
What’s Causing the Great Resignation?
The reasons that employees are quitting are numerous, but among the most commonly cited factors are low or stagnant wages, lack of benefits, safety concerns (especially among employees who work with the general public and are thus at higher risk of exposure to COVID-19), lack of work-life balance, stressful work environments, and feelings of being undervalued or underappreciated. In addition, the growing ubiquity of the gig economy has afforded many workers the opportunity to move toward independent contract work that may offer flexible hours, better work-life balance, and even potentially better earning opportunities than traditional workplaces.
Many young people also see the gradual erosion of social security as inevitable, and with relatively few jobs offering pensions and retirement plans, a growing segment of the workforce feel that their futures are uncertain. Therefore, with few incentives to increase employee loyalty, more people are becoming comfortable with contracted work. The logic here is, if the boss won’t help you save for your future, why are you giving them your time?
The impact of COVID-19 on employment trends can’t be overstated, and these effects will continue as the world adjusts to the changes caused by the pandemic. People are exhausted, overworked, and afraid for their present as well as their future. For many, the last bargaining chip in the fight for a fair workplace is their labor itself.
Comprehensive Benefits may Decrease Turnover
Small businesses in particular must contend with a stressed workforce who have a wealth of choice at their fingertips. So how does an employer onboard and retain a happy, productive staff in these times? One of the major ways to retain employees and compete with the gig economy is to offer something that no gig work can: long-term financial stability through a robust, modern benefits package.
For many workers, a 401(k) is one of the most attractive components of a benefits package. In a 2019 study by MetLife, 60% of employees stated that a retirement plan was a key factor when considering new employment. Fortunately, there are more 401(k) options than ever before, especially for small-to-midsize businesses. In particular, ForUsAll’s Alt401(k) uses cutting-edge digital investment avenues, and more environmentally conscious ESG investment options than a traditional 401(k), to appeal to an increasingly socially conscious workforce. Thus, it addresses two of the biggest concerns among today’s workers: am I prepared for retirement, and how might these investments impact the world?
By offering workers a contemporary 401(k), and by embracing both environmentally friendly ESG investment options and the growing trend of cryptocurrency as features of this retirement plan, employers can use ForUsAll’s new Alt401(k) to provide a modern, diverse set of retirement benefits to a frustrated workforce. These options can potentially decrease turnover rates, while likely increasing worker satisfaction.
Modern Options for a Modern Workforce
Around 49% of millennials are already investing in cryptocurrency, but until now, there has been no place for digital currency in retirement investing. The Alt401(k) allows for up to 5% of retirement investments to be placed into any of up to 40 cryptocurrencies, all of which are accessible via ForUsAll’s self-directed Cryptocurrency Window, powered by Coinbase Institutional. Users can buy, sell, and trade digital currencies, and may even be able to enjoy their potential gains tax-free when they meet certain conditions*. Because the Alt401(k) caps the initial transfer at 5% of the total balance, with a 5% cap on future contributions regardless of allocations, participants have a mixture of both traditional and digital investments, thereby giving workers a well-diversified, blended portfolio.
In addition to its cryptocurrency component, the Alt401(k)’s ESG investment options allow an increasingly socially-conscious generation of workers to direct their retirement savings towards companies that address causes they care about. The Alt401(k) currently has 5 ESG funds in the investment lineup, but users can access 15 others through the brokerage window. These features mean that participants can choose to invest their contributions in funds that are environmentally and socially responsible.
This blended approach means that employees will have more options than a traditional 401(k), while maintaining a well-diversified portfolio to help meet their retirement needs. By allowing traditionally overlooked workers, many of whom are anxious about their futures but stressed about their current working conditions, to take part in retirement investment plans that are designed for a changing world, businesses may increase the staying power of their workforce. Investment options that are transparent, flexible, contemporary, and socially-conscious can appeal to a generation of workers who may otherwise feel that their contributions to the workplace aren’t worth their efforts.
How the Alt401(k) Can Help Hiring Efforts
As hiring coordinators begin casting increasingly wider nets to entice future employees, a compelling benefits package that includes the Alt401(k) may also set a company apart from others and help draw in valuable, qualified staff. If jobseekers see that a company will offer them the chance to not only save for retirement, but get ahead of digital currency trends and explore socially-conscious investing while doing so, hiring teams may find that they have more skilled applicants than ever before.
In addition, with the rise of worker-focused social media posts, public image matters tremendously. Workers want to know that their time and effort is valued, and consumers want to know that a business values its staff.
Act Quickly to Stem the Tide
If the workplace represents a reciprocal relationship between employers and their staff, it’s important to stay on top of what employees are most concerned about, and thus nip resignation waves in the bud before they start. Put simply, in order to get employees to invest their time and energy into their businesses, employers must be willing to invest in their workforce, and ForUsAll’s crypto-friendly, diversified Alt401(k) can help them do just that in a cutting-edge way.
Without drastic changes to demonstrate that the workforce is the heart of a business, more companies may continue to drive the Great Resignation through the beginning of 2022, and perhaps longer.
*Assumes that investments are made using after-tax (Roth) dollars. ForUsAll does not provide tax advice and, of course, the tax laws could change in the future. Currently, though, to be fully tax exempt and subject to withdrawal without penalty, you must meet the 5 year rule for the initial Roth deferral and you must be at least 59 1/2 years old. Consult your retirement plan provider or your accountant for details.