Reassessing your benefit toolbox to help attract and retain talent amid the Great Resignation | MassMutual

The Great Resignation and your benefit toolbox

McDonagh

By Keith McDonagh
Head of the Institutional Solutions businesses for Massachusetts Mutual Life Insurance Co. (MassMutual).
Posted on Feb 25, 2022

It’s being called the “Great Resignation,” the “Great Reassessment,” and the “Great Talent Migration.” Whatever the moniker, it refers to the pandemic-driven trend of individuals reassessing their careers (indeed, their lives) and leaving their jobs for different opportunities or a different path.

As the pendulum continues to swing undeniably toward labor, with employees being highly selective in terms of where they wish to work, employers have doubled down on employee retention and attraction.

Of course, attracting and retaining valued talent has always been an organizational priority; after all, the reason that “our people are our greatest asset” has become such a well-worn phrase is because it’s undeniably true. An institution’s employees are its innovators, its creators of great products and services, and its most loyal customer ambassadors.

A fresh look

To solve for workforce retention amid the Great Resignation, companies are taking a fresh look at their compensation-and-benefits packages — certainly to make those packages attractive to current and prospective employees, but also to ensure that they’re as cost-effective and tax-efficient as possible.

The latter is highly relevant amid today’s current inflationary environment. When a firm’s operational costs — including the cost of employee benefits — are rising, it’s critical to structure a plan that can withstand a rising-price environment. Companies that wish to minimize future funding or cost increases require solutions that can outpace inflation in both the short- and long-term.

The right tools

An employee benefits package has always been analogous to a toolbox. With the right tools, an institution can give its employees confidence that they’re financially prepared both today while they work, and in the future when they retire. As employers reassess their benefits offerings and defined contribution plans, they benefit from leveraging the available funding vehicles and offering diverse investment options.

Today, let’s talk about three increasingly relevant considerations:

1. COLI/BOLI

Corporate-owned life insurance (COLI) and bank-owned life insurance (BOLI) are generally defined as life insurance policies that a company or bank, respectively, purchases on valued employees. These policies protect the organization against the loss of key talent while also providing a tax-efficient hedge against the rising costs of employee benefit programs, including retiree health care and non-qualified plans. In fact, COLI/BOLI enables an organization to provide a robust benefits package that would be much more costly without such a funding vehicle.

Premiums can be invested either in a general account or in a set of fund options across asset classes.

2. Stable value

Stable value investments are another important offering in defined contribution plans, especially valuable amid the recent and ongoing volatility in equity markets. In the three-legged stool of retirement asset categories — active investments and passive investments are the other two — stable value solutions serve as the low-risk, low-volatility component in a resilient, well-diversified retirement portfolio.

With early 2022 equity markets looking choppy, stable value has become an increasingly attractive component of DC plans for investors seeking a safe port in the storm. In addition, as the employee population ages, they become more conservative and seek to stabilize their portfolio and create an income stream that’s less susceptible to market variability. As a result, employers are embracing their obligation to offer their workforce a full range of retirement investment choices, including stable value options.

3. Mutual funds

The third consideration in a retirement benefits strategy is offering employees a well-diversified suite of mutual funds from which they can choose, spanning multiple asset classes, investing styles and geographies.

Along with stable value options, passive index funds and target date solutions are common. However, a well-designed plan also offers a set of active fund solutions to help employees meet their retirement goals.

Trust a Proven Leader

A lot has changed in the corporate world over the last several decades. But one thing remains constant: The most successful companies are the ones with the best talent. Amid the Great Resignation, diligent management teams are focusing on meeting the needs of their most valued assets — and doing so in the most financially effective and tax-efficient manner.

Just as leveraging the right tools to attract and retain talent is a key ingredient to present and future success, so is choosing the right partners when evaluating and designing an employee benefits strategy.

From COLI/BOLI solutions from a leading provider of institutional insurance to investment solutions from a leader with over $30 billion in stable value solutions and over $50 billion in mutual fund assets, MassMutual offers a diverse set of tools for your retirement benefits toolbox.

We can also speak from experience. MassMutual is not only one of the industry’s most highly rated insurers, with wide-ranging investment solutions from leading managers, but is also an employee-focused company that’s been named one of the 2021 Top Places to Work in Massachusetts by the Boston Globe.

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The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.