Recognizing employees is a powerful tool: The number of "shadow contributors" in the workplace has nearly doubled in the last two years, prompting concerns about how HR leaders manage their recognition programs in their organizations.  Shadow contributors are employees who have never been recognized in the workplace, according to the Achievers Workforce Institute (AWI), and its 2024 State of Recognition report revealed that their numbers went up to 17% in 2024, compared to 10% in 2022.  According to the report, 45% of employees who get recognized at least monthly feel very engaged at work, much higher than the percentage who get recognized quarterly (28%) and annually or less (23%). Those who are recognized at least monthly are also most likely to say they're productive and would recommend the organization as a great place to work. They are also less likely to think of opportunities outside the organization.   Source: HR Director 6/3/24

Travel budgets increasing and are surprisingly a recruitment tool: The Value of Business Travel Report, which included 4,600 business travelers and 625 travel managers and administrators within the TravelPerk customer base as well as 2,000 company decision-makers outside TravelPerk's customer base, 540 of whom were C-suite leaders, showed that 62% of CEOs expect a year-over-year increase to their travel budgets.  U.S. companies were the most bullish in the survey, with 61% of companies planning to increase budgets.  Additionally, 82% of U.S. CEOs and 65% of European CEOs in the survey said business travel helps with employee retention, and 75% of HR decision-makers in the survey said that adding business travel opportunities in job descriptions made them more attractive to applicants. Among the traveler segment of the survey, 63% said traveling for work makes them more likely to stay with their current employer, and that increased to 76% among the subset of Generation Z employees.  The report indicated that companies that increased their travel budget in 2023 had an employee turnover rate of 8.6%, which is below the Gallup average of 10% and 3.5 points lower than companies that reduced their budgets.  Source:  Travel Weekly 6/18/24

Will Gen Xers be able to retire eventually? Gen X — people born between 1965 and 1980 — is the first generation of U.S. workers to come of age with 401(k) plans as their primary retirement vehicle after employers largely shifted away from traditional pensions in the 1980s.  About 1 in 5 Gen Xers worry they won't be able to afford to step back from work even if they were able to save $1 million for retirement, a Natixis, an investment bank, study found. And about one-quarter is concerned a shortage of savings will force them to return to work after they retire. They have squirreled away according to Natixis about an average retirement savings $150,000 — far from the roughly $1.5 million that Americans say they need to retire comfortably. Other recent studies have also found that Gen X is in dire shape for retirement, with the National Institute on Retirement Security finding earlier this year that the typical Gen X household with a private retirement plan has $40,000 in savings. About 40% of the group hasn't saved a penny for their retirement, that study found.  Now is a good time for financial wellness and planning opportunities for this forgotten generation, especially since many want to retire at 60.  Source: CBS News 6/18/24

More employees want annuities in their 401Ks:  Some 42% of defined contribution plan participants stayed invested in their plan three years after retirement, J.P. Morgan found in a recent study. That 42% is double the number of retirees who decided to stay put just 10 years ago.  According to a T. Rowe Price survey of 3,016 retirement plan participants, 83% of 401(k) participants expressed interest in staying put in their current 401(k) plan, while 53% said they would consider keeping their savings in their employer plan if it offered vehicles such as in-plan annuities to help generate income during retirement.  A survey from Pew Institute found a similar story: 35% of near-retirees reported that they intended to keep their retirement assets invested in their existing plan after retirement. Participants said plan investment options, lower fees, and investing convenience were all primary reasons for their decision to stay put. Some 70% of non-retired plan participants said they would be somewhat or very likely to select an in-plan annuity for lifetime income, according to LIMRA’s 2023 “Retirement Investors Survey.”  Talk to your plan administrators about this investment if you don’t have one already.  Source:  Financial Advisor 6/19/24

IRS issues fact sheet on educational assistance programs:   The IRS has issued a new fact sheet (FS-2024-22) to address frequently asked questions about educational assistance programs (EAPs), also known as Section 127 plans.  EAP plans have been an effective recruitment and retention tool for many employers over the past two decades and remain popular with employees because the payments are tax exempt to employees and tax deductible to employers. In order for payments made under an EAP to be tax-free to employees, the EAP must:

1. Provide benefits exclusively to employees of the employer;
2. Comply with non-discrimination rules that prohibit discrimination in favor of highly compensated employees;
3. Limit benefits provided in any given calendar year to individuals deemed to own 5% or more of the company so that those benefits do not exceed 5% of total benefits provided;
4. Provide benefits only for tuition, books, fees and supplies/equipment that the employee may not keep upon completion of the course;
5. Be established pursuant to a separate written document;
6. Prohibit an employee from electing cash (or other taxable compensation) in lieu of educational assistance; and
7. Provide no more than $5,250 of excluded educational assistance to an employee with respect to any given calendar year.

The FAQs further clarify that such loan reimbursements are not available to spouses or dependents because an EAP must be exclusively for employees.  Source: Littler 6/20/24