Small Businesses Expand 401(k) Plans as Gusto Data Shows 8% Fewer First-Year Quits
Updated
Updated · Business Insider · Aug 16
Small Businesses Expand 401(k) Plans as Gusto Data Shows 8% Fewer First-Year Quits
3 articles · Updated · Business Insider · Aug 16
Summary
401(k) plans are becoming a bigger small-business hiring tool, with owners saying the benefit helps them compete for workers and keep staff they cannot yet support with costlier healthcare coverage.
Gusto said small employers offering 401(k)s see roughly 8% fewer quits in employees’ first year, when turnover risk is highest and replacement costs can hit productivity and training budgets.
Payroll platforms such as Gusto and ADP have made setup cheaper and simpler, while healthcare remains far pricier—BLS data showed family medical coverage contributions at firms with under 50 workers have topped $1,000 per employee since 2021.
Indeed data show job postings mentioning 401(k)s have risen since 2020, and listings advertising a 5% or higher match have increased more than fivefold from January 2020 levels.