Employers are feeling confident about their financial futures and that means more new hires, fewer layoffs, and an increase in retirement benefits and reinstatements of certain benefits, according to the 12th Annual Transamerica Retirement Survey released on Tuesday.
The survey conducted with 743 U.S. employers by the Transamerica Center for Retirement Studies found that retirement benefits and educational tools were more common among large employers, with 500 or more employees, than small employers, with less than 500 employees.
This year’s study revealed that employers have had a boost in confidence, with 59% of employers expecting their company’s financial situation to improve over the next year, up from 49% a year ago. Meanwhile, 48% expect the economy to improve over the next 12 months, up from 45%. In addition, employers are reporting higher levels of employment, with 55% hiring additional employees in the last twelve months. Large companies are more likely to hire more, with 69% saying they hired workers compared to 54% of small companies. Additionally, there were fewer layoffs at companies compared to last year.
The study found that for the first time since the financial crisis began, employer’s rise in confidence has translated into an increase in enhancements to retirement benefits as well as intentions to reinstate certain benefits that had been suspended since 2008. The percentage of employers offering matching contributions to their 401(k) or other retirement plans is roughly the same as last year’s survey, but the survey found that 51% of companies that recently decreased or suspended the match plan to reinstate it within the next two years.
“Hopefully the other half will follow their lead,” said Catherine Collinson, president of the Transamerica Center for Retirement Studies, in a press release. “As we continue to emerge from the recession, employers can attract and retain the best employees by offering competitive benefits packages, while at the same time making a positive impact on their employees’ retirement outlook.”
For the small companies that do not currently offer a 401(k) or other retirement plan, only 21% report they are likely to begin offering a plan in the next two years because of difficult business conditions (47 percent), concerns about cost (43 percent) and perceived lack of employee interest (43 percent).
“As the jobs and growth engine of our economy, small businesses can play a vital role in helping American workers prepare for retirement,” said Collinson. “By sponsoring a 401(k) plan, encouraging participation, and promoting available planning tools, these employers can help workers save and invest for a more secure retirement.”