Plan sponsor Salas O’Brien plans to establish across the company clearly defined processes for employer benefits and compensation, and is interested in learning more about nonqualified retirement plans, after the firm promoted Lucas Hellmer to the role of director of compensation and benefits earlier this year.  

The Irvine, California-based construction engineering company will consolidate its approach to compensation to drive greater recruitment of workers, Hellmer says.

“We’re talking [from the] foundational level setting up pay grades for the first time, benchmarking compensation, setting up executive pay structures [and] equity awards,” he says. “Compensation is certainly a hot ticket for everyone, I’m sure, but especially in the engineering industry [because it’s] very, very difficult to recruit for, as you can imagine, mechanical and electrical engineers,” he says. 

Hellmer and Salas O’Brien plotted the changes because the firm’s total compensation and workplace benefits are viewed as tools to retain workers and recruit new employees, says Hellmer.

From “the total comp perspective, it’s a direct correlation to recruitment as well as retention,” Hellmer says.

Possible Retirement Plan Changes

Hellmer is also interested in learning about nonqualified retirement plans to help with compensating company leaders.

“I just heard about [nonqualified plans at the PLANSPONSOR National Conference 2023 panel Improving Retirement Success for Executives],” Hellmer says. “There’s certainly an opportunity for us to really start to explore—as our organization continues to grow—the [employee demand] we’ll identify, [because] as we’re pulling in bigger leaders within the organization, we need to be able to compensate them appropriately.”

Plan sponsors also must get better at going beyond recruiting and onboarding employees, Hellmer says, by using robust benefits and education about benefits to help convince valued workers to remain at the firm.

“It’s really two different parts [to retain and recruit],” he says. “From an [employee] attraction perspective, making sure that we offer competitive benefits to be able to move [individuals] from whatever company that they’re at today. We have to be doing at least what they’re doing or maybe even better to get them over, but also retaining the people that we have.”

As part of the benefits education efforts Hellmer adds that he plans to incorporate into the retirement plan tools for participants to compare their savings and retirement planning progress against peers in their age group.

“That’s going to drive more of the decision making by providing many of those benchmarks to the age populations to let them know [if they’re] behind the eight ball already [for retirement savings],” Hellmer says. “[Employers also] need to make an active choice and say, ‘Hey, by the way, we offer these choices … and … you can now make an educated decision on where you’re at with [the amount of savings relative to] your peers, and by doing that, participants will be able to make a good choice in terms of getting prepared for retirement, whatever life cycle that they’re at.”

The plan sponsor is also considering adding tools to show “what individuals are doing, [how and when to save in a Roth versus] traditional 401(k) [and] how many people are taking advantage of Roth when they should be?” Hellmer says. “As a participant myself, I’d like to see where I should be, rather than knowing just what options I have,” or being reminded to save at a specific rate by the plan sponsor.

Addressing Challenges

When Hellmer joined Salas O’Brien, “the comp and benefits area was undefined,” he says. Hellmer explains that one priority is “continuing to define compensation and benefits] and [to] set, processes in place for our organization.”

Hellmer has also set up two high-deductible health plans at the firm, pairing the plans with a health savings account.