Data and Research July 17, 2019

Small Business Employees Benefiting From Enhanced DC Plan Design

The adoption of enhanced defined contribution (DC) plan features has led to increased plan participation and optimized portfolio construction for small business employees, according to Vanguard.

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Small business plan participants are benefiting from enhanced retirement plan features, including professionally managed allocations, which have led to increased plan participation and optimized portfolio construction, according to Vanguard’s “How America Saves: Small Business Edition.”

Like participants in larger plans, participants in smaller plans have reduced their trading and withdrawal activities.

In 2018, two-thirds of plans recordkept by Vanguard were invested in a professionally managed allocation, with 61% of all participants invested in a single target-date fund (TDF). Among new plan entrants, 75% were invested in a single TDF.

In 2018, 19% of participants held broadly diversified portfolios, with only 3% had no allocation to equities. At the other end of the spectrum, 7% had all of their money invested in equities.

Vanguard also found that among the plans using automatic enrollment, the participation rate was 82%. Among plans without this feature, the figure is 54%. Additionally, among participants earning less than $30,000 a year, the participation rate was more than double in plans with automatic enrollment than in plans that rely on participants to enroll on their own.

Only 7% of participants initiated one or more portfolio trades in 2018. Among plans recordkept by Vanguard, 85% permit plan withdrawals among people 59-1/2 or older, but less than 1% of participants used the feature in 2018.

“Positive participant behaviors coupled with the increased use of professionally managed accounts is making a difference in the retirement readiness of small business 401(k) participants,” says Jean Young, author of the report and senior research associate at the Vanguard Center for Investor Research. “The increased use of the features and tools available points to the continued commitment by plan sponsors to further drive these improved outcomes.”

Break from the Grind July 16, 2019

Texting a Growing Communication Method Between Applicants and Employers

Although they cite both benefits and pitfalls 67% of hiring managers surveyed by Robert Half use texting to communicate and coordinate interviews with job applicants.
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Texting has taken over as a communication method for many aspects of human life, and a survey shows it is now infiltrating the communication between job candidates and hiring managers, especially for IT jobs.

 

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Two-thirds (67%) of IT managers use texting to communicate and coordinate interviews with job applicants, a Robert Half survey found. And, nearly half (48%) of employees have used texting to correspond with a hiring manager.

 

Both hiring managers (43%) and employees (44%) say the biggest benefit of texting between job candidates and employers is quick communication. Twenty-four percent of managers and 19% of employees cite discretion, and 22% of managers and 20% of employees say ease and preference is a benefit. However, 12% of hiring managers and 17% of employees say there is no benefit of texting because there is too much room for error.

 

Miscommunication is the biggest downfall of texting between job candidates and employers for both managers (45%) and employees (40%). Twenty-nine percent of hiring managers and 17% of employees say it appears unprofessional, and 16% of managers and 12% of employees say there is too much room for error. In addition, 17% of employees say texting between job candidates and employers is too personal and invasive.

 

“Managers are taking steps to speed up the recruiting process,” said Ryan Sutton, a district president of Robert Half Technology. “Using texting as part of your hiring efforts may mean the difference in getting to your top candidate first and fast, especially at a time when they could be receiving multiple offers.”

 

However, he warned that “this form of communication can have its limitations. Whether you’re looking for a new job or a new employee, use texting wisely—and watch your etiquette.”

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