Small businesses with fewer than 500 employees see retirement plans as one of the top three ways to attract employees in today's tight labor market, according to a study released Thursday by the ADP Research Institute.
Nearly 75% of employers with 50 to 499 employees said retirement plans were extremely or very important to attracting employees, more than the 64% who said that special bonuses and increased pay were important.
Enthusiasm over retirement plans among the smallest of employers — those with fewer than 50 employees — was more muted, with 41% viewing them as extremely or very important in recruiting. Micro employers saw health insurance and flexible work hours as more enticing to potential employees.
Small employers — whether micro or not — viewed "finding qualified employees" as their top business challenge. The concern was more pronounced among employers with more than 50 employees, with 64% citing it as a business worry.
Employer concerns over scarce labor, however, are down from their peaks in March 2022, according to ADP's data.
"The labor shortages, while persistent, are starting to ease a little bit," said Julie Arzonico, senior director of Market Insights at ADP, during a webinar on the study.
ADP's small business client pulse study surveyed 1,493 employers with less than 500 employees from Jan. 19 to Feb. 6. It is the sixth in a series of surveys that started in May of 2021.