1. Compensation Remains the Top Priority

Compensation continues to be the most important consideration for employees, with over half (56%) of survey respondents identifying it as their primary concern. This trend has been rising since 2022 and aligns with ADP's People at Work 2024 study, where 55% of participants globally ranked salary as their top priority. However, striking the right balance between compensation and benefits is critical. Accountants and their clients must understand which benefits are most valued to create a compelling compensation package.

2. The Growing Importance of 401(k) Plans

The significance of 401(k) retirement plans has surged, with an 11% increase in importance since 2022. In 2024, 62% of employees ranked 401(k) plans as one of their top three benefits, a significant jump from 30% in 2018.

For the first time in the survey's history, 401(k) plans tied with dental insurance as the second most important benefit. This trend highlights the growing focus on financial wellness and retirement planning. Accountants can capitalize on this by assisting their clients in offering robust retirement savings plans to attract and retain talent. Additionally, there is a notable gender gap, with 59% of women respondents rating 401(k)s as important compared to 66% of men, indicating a need for tailored communication and education for each client’s unique needs.

3. Healthcare Costs and Employee Choices

Employees are increasingly making hard choices about healthcare costs, balancing premiums with out-of-pocket expenses. The survey revealed that more employees prefer lower paycheck deductions for healthcare costs, even if it means adjusting other benefits. In 2024, 53% chose lower paycheck deductions compared to 47% in 2018. Gen Z in particular favors more money in their pockets, with 58% opting for lower premiums. Accountants can advise their clients on options like Health Savings Accounts (HSAs) and

emergency savings accounts to help employees prepare for unexpected healthcare costs. Moreover, the survey found that while many employees want less taken from their paychecks, they often have limited funds for unexpected healthcare expenses, with 28% having less than $500 set aside.

4. Benefits Impact on Attraction and Retention

The survey underscores the critical role of benefits in employee attraction and retention.

Compensation is always foremost, but benefits are a close second. Over three-quarters (78%) of employees feel valued due to medical benefits provided by their employer, and 82% feel valued due to non-medical benefits like 401(k) plans, flexible work arrangements, and life insurance. Advisors should focus on the right mix of salary and benefits to meet the expectations of client’s potential job candidates and to help them retain current employees in a tight labor market. The right benefits package can significantly impact an employee's decision to accept a job offer or remain with their current employer and understanding that can help accounting firms make insightful advisors.

5. The Need for Flexible, Personalized Benefits

Employees increasingly desire flexible, personalized benefits that address their unique situations. The survey found that 75% of employees expressed interest in receiving personalized recommendations for benefits. Despite feeling valued by their employers due to medical and non-medical benefits, voluntary benefits are underutilized. Advisors can help clients maximize the value of their offerings by prioritizing benefits that fit employees' actual needs, fostering a more satisfied and engaged workforce. Additionally, the importance of mental health benefits varies by generation and gender, with Gen Z and women placing higher value on these benefits, highlighting the need for bespoke recommendations based on the client’s workforce.

By Mohammed Fahmy, SVP and General Manager at ADP

ADP's TotalSource Benefits Employee Survey highlighted the evolving priorities of employees regarding their workplace benefits. Accounting firms who understand and advise on these insights can create compelling consultative services so their clients can attract and retain top talent in today's competitive labor market. By advising on a balanced mix of compensation and benefits and tailoring these offerings to meet the diverse needs of their workforce, they can advise clients to help them can build for productivity and growth.