For a long time, access to a retirement plan was something employees got by working at a larger company. If someone wanted a 401(k), they probably needed a company large enough to have an HR department and its own benefits administrator. Many small businesses assumed prices were too high, with too much admin overhead, so many didn’t bother to offer one. That assumption held for decades. However, that has changed greatly over the last decade thanks to a combination of technological advancements and new government policies.

At Gusto, we provide retirement access to small business owners and their employees. Recently, we looked at retirement plan adoption among businesses with two to 99 employees, and what we found was incredibly inspiring. From 2019 to 2026, active plan adoption rose from 19% to 31%, an increase of about 64%. And the businesses driving the majority of that growth are the smallest employers. Businesses under five employees doubled their adoption rate, from 10% to 20%. Businesses with five to nine employees grew 64%, from 22% to 36%.

Equally exciting are the industries powering some of this growth: hospitality, recreation, and agriculture. Many employees working in these fields are hourly workers, who have historically been the last group to get access to workplace benefits. But we saw their access to a retirement plan rise 79% since 2019. What this tells me is that there is a clear structural shift happening in what it means to work for a small business.

Source link