July work report marks the official end of the “war for talent”, with new job growth falling short of experts' expectations and the unemployment rate up to 4.3% compared to 3.5% last July, the highest since October 10/21. The “war” had been winding down for months, but July's numbers prove it's officially over for now. So how will it affect 401(k) and 403(b) plan sponsors and plan design?

The war for talent began about a year after the pandemic when, after losing 20 million jobs, organizations began to retool to adapt to a virtual workplace. The big resignation added fuel to the fire.

As a result, organizations shifted their view of their DC plans from tactical, like health care plans, where the focus is on costs, to a strategic benefit used to recruit and retain workers. HR and finance professionals who manage most DC retail plans were given more resources by senior management and front-line recruiters emphasized their retirement plan.

So will the end of the war for talent return the DC retail market to the dark ages when the main focus was on fees, funds and reliability?

Although there will be less focus on using DC plans to recruit, it will remain a key retention tool. HR professionals know the high cost of losing valuable employees, as well as the huge amount of time it takes to find and train new ones. There are ways to design a plan to help with retention, such as lower vesting schedules (although controversial, five-year vesting is archaic and dysfunctional), guaranteed retirement income or periodic payments, automatic features, personalized investing , student loan repayment programs and emergency savings plans.

Covid didn't just transform our approach to work; it also accelerated trends such as technological advances and the gig economy. Telecommuting – whether part-time or full-time – has revolutionized the workplace and office environment by enabling global connectivity. Now, benefits such as retirement plans are more than just incentives to retain employees; they are essential for engaging and supporting remote workers.

And although life expectancy is currently decreasing, in the long run, people are healthier by living longer with many older workers not only staying, but returning to work with benefits and retirement income a draw. According to a recent Schwab survey, participants said they expect to receive 43% of their income from DC plans.

More people are comfortable getting advice through AI and ChatGPT, but prefer it via a three-to-one person – enabling advice workers through technology will be key to delivering advice at scale more likely through the workplace where there is more trust, oversight and at least some data. And while accessing data is difficult and fraught with risks, it is improving and will be fueled by engagement.. Retail and consumer businesses have little difficulty obtaining data from customers and prospects because they provide value in return.

Finally, both federal and state governments are moving toward requiring and encouraging employers to offer workplace retirement plans. causing DC's plans to explode. This will bring to 275,000 wealth advisors who do not focus on DC plans to help customers, mine for wealth prospects and keep out 12,000 RPA specialists. Laws have allowed for spread of PEPs, which enable plan sponsors to reduce liability, labor and, ultimately, costs.

So while the war for talent is officially over, the way employers view DC plans has changed and won't go back to pre-pandemic times. The proverbial toothpaste is out of the tube.