Federal Court Ruling May Put Millions of US Companies In Breach of ERISA Fiduciary Duty

By Mployer Team
Feb 14, 2025
Updated
November 17, 2025
6
min read

Key Takeaways

  • A Federal District Court Judge in Northern Texas ruled that American Airlines had breached its duty of loyalty to its employees under ERISA because BlackRock, the investment manager American Airlines had enlisted to manage its retirement accounts, had promoted ESG policies that the judge determined went against the financial interests of the employee beneficiaries.
  • The repercussions of this ruling could be industry-reshaping if upheld. However, many additional conflicts of interest between American Airlines and BlackRock may not be broadly applicable to most potential cases with a similar fact pattern. This case may be especially egregious even among similar cases given that the judge views ESG policy interests and fossil fuel company financial interests as being in direct opposition.
  • While it is recommended that employers eliminate conflicts of interest with retirement fund investment managers wherever possible and optimize communication and oversight reporting with both internal and external auditors, it remains unclear if American Airlines would have been in breach of its duty of loyalty had it maintained better oversight over BlackRock and had BlackRock continued factoring ESG considerations into investment decisions anyway.

Article - Federal Court Ruling May Put Millions of US Companies In Breach of ERISA Fiduciary Duty

A recent ruling from a Federal judge in Texas has put nearly every company in the US that offers a retirement or pension fund at risk of being sued for failing to uphold their fiduciary duties to their employees.

The core issue of the case is whether an employer can be found in violation of the Employee Retirement Income Security Act (ERISA) as a result of entrusting retirement funds to investment managers that take into account corporate environmental, social, and governance (ESG) considerations when managing those funds.

Based on this latest court ruling, much to the surprise of many legal observers, the answer to that question appears to be ‘yes, companies can be held liable for retaining retirement fund investment managers whose investment practices incorporate ESG principles’ - at least for the time being.

What remains to be seen, however, is the amount of money that the defendant company will have to pay as a result of their adjudicated infraction, which in turn is likely to have a major impact on how widespread the repercussions of this ruling will be given that a string of both appeals and copycat plaintiffs are almost certain to follow any final order front the judge that includes a substantial amount of money changing hands.

Spence v. American Airlines

The lawsuit in question was filed in the Summer of 2023 when a senior pilot with American Airlines initiated a class action lawsuit against his employer on behalf of more than 100,000 participants in a 401(k) plan offered by American Airlines.

The issue at hand stems back to an incident that occurred 2 years prior in the summer of 2021 when global investment giant Blackrock joined other major investment managers and activist investors to exercise their shareholder voting rights and elect 3 ESG-friendly board members to the 12-member ExxonMobil Board of Directors, which is an outcome ExxonMobil leadership at the time had spent months fighting to prevent.

Spence claimed that Blackrock was engaging in the pursuit of ‘non-financial ESG policy goals’ and that American Airlines was in violation of their fiduciary duty by utilizing Blackrock as investment managers for the management of those 401(k) funds.

Fiduciary Duty: Prudence & Loyalty

In accordance with ERISA, employers, and their agents - such as plan trustees, plan administrators, and members of plan investment committees - owe a fiduciary duty to act and make decisions that are in the best interests of plan beneficiaries.

This fiduciary duty encompasses many responsibilities under the law, including a responsibility to diversify investments, avoid conflicts of interest, and follow plan guidelines, but in the class action lawsuit Spence brought against his employer American Airlines, however, he alleged only violations of the fiduciary duty of prudence and the fiduciary duty of loyalty.

Interestingly, the standards and regulatory guidance for evaluating prudence and loyalty in the context of fiduciary duty have been in flux in recent years, with the Department of Labor for the then-outgoing Trump administration issuing final rules with amendments regarding the fiduciary duty of prudence and loyalty in mid-November 2020.

According to those amendments, prudence requires plan fiduciaries to make investment decisions based exclusively on “pecuniary” or financial factors. Loyalty requires that plan fiduciaries determine that potential investment alternatives are ‘economically indistinguishable’ from each other before fiduciaries can take into account potential collateral benefits beyond investment returns, in which case those collateral benefits essentially function as a tie-breaker.

In November of 2022, however, the DOL for the Biden administration issued a final rule that interpreted the fiduciary duties of prudence and loyalty in a way much more favorable to ESG considerations.

According to the Biden DOL clarifications, prudence requires decisions to be based on relevant risk and return factors with ESG being among the factors that can be rightly considered, and loyalty does not prevent plan fiduciaries from taking collateral benefits into account so long as plan alternatives equally serve the financial interests of beneficiaries over time.

While the Biden DOL’s final rule overrode the final rule issued by the Trump administration DOL in November 2020, Biden’s final rule did not take effect until January of 2023, so the Trump DOL rules were still applicable when Blackrock was among the investors that won the proxy battle against ExxonMobil in the summer of 2021.

Now that Trump has returned to the White House, it’s also worth noting that the definitions of prudence and loyalty about fiduciary duty under ERISA are likely to revert to the interpretations his previous administration issued shortly before he left office in 2020.

Where Did American Airlines Go Wrong?

In evaluating Spence’s claims against American Airlines, the judge determined that American Airlines had been prudent, but they had not been loyal.

Although Spence claimed that American Airlines had violated its duty of prudence by not directly monitoring Blackrock’s proxy voting activism and instead depending on a third party to do so, the judge ruled that the employee benefit committee at American Airlines had been prudent and exceeded industry expectations by meeting regularly with both internal and external experts to review and monitor plan performance.

As for Spence’s claim that American Airlines had breached their duty of loyalty, however, the judge determined that American Airlines was in fact in violation of the law because they failed to keep their own “corporate interests separate from their fiduciary responsibilities” which led to “an impermissible cross-pollination of interests and influence on the management of the Plan.”

The judge found that Spence provided sufficient evidence showing American Airlines was incentivized to ignore BlackRock’s shareholder activism in part because BlackRock owns both hundreds of millions of dollars worth of American Airlines stock, as well as hundreds of millions of dollars worth of American Airlines debt, which may have led American Airlines to become lax in its oversight of BlackRock’s retirement fund management practices.

In support of his finding that the duty of loyalty had been breached, the judge also cited an American Airlines employee who served both as corporate liaison to BlackRock and as a member of the American Airlines fiduciary committee and said that billions of dollars of potential loans might have been at risk if American Airlines had not followed ESG reporting protocols.

The judge further noted in support of his conclusion that the American Airlines asset management group had not requested information about BlackRock’s proxy voting, nor had American Airlines expressly asked the third-party consultant to review Blackrock’s proxy activities, nor had American Airlines received mandated reports from BlackRock about their proxy voting intentions.

Although he made clear in his judicial opinion that ESG considerations are not entirely impermissible and can be taken into account purely from a financial perspective as another factor or tool that can be utilized to help maximize long-term financial gain, the judge did not find that to be the case in this instance where BlackRock’s climate change goals seem at odds with the financial interests of ExxonMobil, whose primary area of business involves selling fossil fuels.

What Happens Next?

Recommendations as to what losses were incurred and what remedies are most available and appropriate were due from both Spence and American Airlines by the end of January, which the judge will review before ultimately deciding on damages.

Although the judge has already found American Airlines to be in breach of its duty of loyalty, the penalties assessed for their infraction will likely be very influential both on a micro and macro level and can significantly impact how widespread the impact of this decision will be.

For one, the amount of damages owed will probably play a significant part in American Airlines’ decision on whether or not to appeal the ruling in this case, which would result in drawing more attention to the lawsuit and either solidifying or overturning the ruling.

Equally if not more importantly, the severity of the remedy that the judge ultimately hands down will directly determine whether the damages awarded are sufficiently large to inspire a wave of lawsuits initiated by employees against their employers on similar grounds now that they have been validated in court.

Mployer’s Take

The potential size of the seismic quake that could come in the wake of this ruling can hardly be overstated.

That said, at this stage of the game, it is not yet certain at all that the aftershocks of this lawsuit will extend beyond the Northern District of Texas.

If the judge decides to bring his hammer down on American Airlines and requires them to pay a steep penalty, there may well be tens to hundreds of millions of plaintiffs who come out of the woodwork ready to step up and sue their employers on similar grounds.

In fact, in the inciting incident in this case, BlackRock was joined by State Street and Vanguard in electing the 3 dissident members to ExxonMobil’s board. These firms have all been ESG proponents and collectively are responsible for managing over $5 trillion in retirement assets - more than 12% of total retirement funds in the US - which could lead to tens of millions of additional plaintiffs from this one incident alone.

It’s unclear at this point just how broad this decision will ultimately prove to be beyond this particular case and proxy voting incident, however, since the judge pointed to the friction between climate change economics and fossil fuel economics as particularly at odds, and there were several clear conflicts of interest and breakdowns in communication and/or oversight on the part of both American Airlines and BlackRock, as well.

On the other hand, despite the conflicts of interest and insufficient proxy voting oversight, it remains unclear just what American Airlines was supposed to do to avoid this outcome in the first place.

Regarding the conflicts of interest, American Airlines presumably utilized BlackRock as a creditor because they provided the most favorable loan arrangements, and the airline has no control whatsoever about the equity stake in their company that any given investor like BlackRock might control at any given time.

The judge even noted in his decision that BlackRock’s significant ownership stake and outstanding debt with American Airlines “are not enough on their own to constitute disloyalty,” which seems to indicate the crux of the fiduciary duty violation is really the lack of oversight.

Even if American Airlines had been monitoring BlackRock’s ESG advocacy more closely, however, they were in no position to meaningfully influence BlackRock’s investment strategy one way or the other.

Essentially, if American Airlines violated its duty of loyalty by not monitoring BlackRock’s ESG promotion, then American Airlines would also have been in violation of its duty of loyalty just the same if it had been monitoring BlackRock’s proxy voting and had continued utilizing its retirement investment services anyway, so what choice did American Airlines have except to find a different investment manager that did not incorporate ESG into their investment decision-making process?

Regardless of how this case proceeds, one central takeaway from this situation is that employers would be wise to minimize conflicts of interest with retirement fund investment managers wherever possible, in addition to maximizing communication and oversight reporting with internal and external auditors.

The question as to what standards and by what measures employers are expected to hold retirement investment fund managers to account, however, especially about ESG-related issues, may not be adequately addressed, let alone answered, until long after this case reaches its final resolution.

It is still very possible, even after the judge’s finding that American Airlines breached their fiduciary duty to their employees that this case will ultimately conclude relatively quietly. If this ruling is upheld and reinforced in follow-up cases, however, it may simply be the end of ESG investing or we may very well be on the cusp of experiencing a sea-change-like shift in the employee benefits management industry.

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Communicating the Value of Benefits Increases Applications and Improves Close Rates

November 7, 2025

Competing for Talent in a Constrained Market

The labor market remains highly competitive, particularly for skilled and high-performing roles. Despite some macroeconomic cooling, the structural shortage of qualified talent persists: nearly three-quarters of employers continue to report difficulty filling key positions. At the same time, employee expectations have evolved — flexibility, security, and well-being now weigh as heavily as base compensation in determining employer preference.

For most organizations, benefits represent one of the largest investments in the total rewards portfolio. Yet in practice, those investments are often under-leveraged in the recruiting process. Health coverage, retirement plans, paid time off, and wellness programs frequently appear as a brief bullet point in job descriptions or are mentioned only when an offer is extended. By that stage, the opportunity to differentiate has largely passed.

Mployer’s recent survey of more than 700 companies across 17 industries found that employers who clearly communicate the value of their benefits — and substantiate that value through credible data or recognition — are nine times more likely to be selected by candidates and to convert accepted offers. Transparency and validation drive both higher-quality applicant flow and stronger offer acceptance rates.

Transparency Converts Interest Into Action

In a competitive market, candidates are no longer applying indiscriminately. They evaluate prospective employers through publicly available information, reviews, and visible signals of value. When benefit information is vague, candidates interpret that as a risk. “Competitive benefits” have become shorthand for “average,” and uncertainty creates hesitation.

Conversely, when an organization provides a clear, quantified, and credible overview of its benefits, the dynamic changes immediately. Candidates are more willing to engage early, stay active through the interview process, and make faster, more confident decisions.

  • 89% of candidates say they are more likely to apply when an employer provides clear benefit details.
  • 90% say they are more likely to accept a role when benefits have been recognized or benchmarked externally.

Clarity reduces friction. It replaces speculation with understanding and shifts the employer-candidate relationship from negotiation to alignment.

The Missed Opportunity: The Awkward Offer Conversation

In many recruiting processes today, the discussion around benefits occurs only after a verbal or written offer is made. The exchange is familiar: the candidate receives the offer, reviews the salary, and then pauses at the benefits section — uncertain whether what’s being offered is “good” or “below market.”

Recruiters often find themselves attempting to explain why the plan is competitive, citing anecdotal points about employer contributions or coverage levels. But without comparative data, the explanation sounds defensive, not differentiating. The candidate may nod politely but remain unconvinced — or worse, use the ambiguity to negotiate or delay.

At that stage, the opportunity to use benefits as a selling point has already been lost. The employer is reacting rather than leading.

In contrast, organizations that proactively communicate the strength of their benefits — in quantitative and comparative terms — enter offer discussions from a position of confidence. The candidate already understands the total value being provided and perceives the offer as comprehensive, not partial.

This is the distinction between defending your benefits and leveraging them. One undermines momentum; the other accelerates decisions.

Making Benefits a Strategic Differentiator

Leading employers are now approaching benefits communication as a core component of their talent strategy — not an HR formality. Several best practices have emerged:

  1. Integrate Benefits Early in the Candidate Journey
    Incorporate concise benefit summaries directly into job descriptions, career pages, and early-stage recruiting materials. Candidates should understand your total rewards value before they ever meet a recruiter.
  2. Quantify Total Rewards Clearly
    Provide a simple, high-level estimate of annual benefit value. For example, “This role includes approximately $18,000 in annual benefit value beyond base salary.” Quantification allows candidates to make informed, apples-to-apples comparisons across competing offers.
  3. Leverage Third-Party Validation
    External benchmarks and awards give candidates confidence that your benefits are not only competitive, but verified. Independent recognition communicates quality far more effectively than internal claims.
  4. Equip Recruiters with Data
    Provide recruiters with accessible talking points and benchmark comparisons. When recruiters can articulate specifics — not generalities — they move from explaining to demonstrating.

These practices shorten time-to-hire, increase offer acceptance rates, and strengthen employer brand equity in measurable ways.

From Hidden Cost to Competitive Advantage

For many organizations, benefits are treated primarily as a cost center — a compliance requirement and a necessary expense. In reality, they are one of the most powerful levers available for talent attraction and retention.

When the value of those benefits is communicated with clarity, evidence, and confidence, the perception shifts. The benefits package becomes part of the employer’s market narrative — a tangible signal of how the company invests in its people.

In a tight labor market, that clarity doesn’t just help you attract candidates; it helps you close them.

How Mployer Enables Employers to Compete

Mployer helps organizations turn their benefits into a verified strategic advantage. We independently evaluate and rate employee benefit plans, comparing them across thousands of employers nationwide.

Participating organizations receive a clear assessment of how their benefits stack up against peers, along with recognition materials and benchmarking insights that can be shared directly with candidates. These assets — digital badges, comparison visuals, and concise summaries — give recruiting teams the ability to communicate benefit value credibly and consistently.

Employers across the country are already using Mployer’s data-driven validation to increase applicant volume, improve offer acceptance rates, and reinforce their reputation as employers of choice.

If you’d like to see how your benefits compare, we offer a free initial benchmark report to qualified employers. Join thousands of organizations already leveraging independent proof to strengthen their talent strategy — and move from explaining your benefits to winning with them.

Winning the Talent War: How Great Benefits and Communication Drive Employee Retention

October 23, 2025

In today’s hyper-competitive labor market, the fight for high-end talent has become a defining business challenge. Organizations invest significant resources into hiring and developing high- performing employees—only to lose them to competitors offering slightly higher pay or better benefits. The cost of voluntary turnover is not only financial; it disrupts operations, damages customer relationships, and erodes company culture.This white paper explores how offering market-competitive benefits—and communicating them effectively—dramatically reduces voluntary turnover. Backed by Mployer’s proprietary benchmarking and benefit rating data, we’ll show how employers that promote their benefits will experience on average 27% lower voluntary turnover each year and potentially up to 51% lower annual turnover compared to peers.

The Cost of Losing Great Talent

Every HR leader and CFO understands the financial cost of turnover—but few quantify its full scope. When an employee leaves voluntarily, costs include:

• Recruiting and onboarding new talent (often 30–50% of annual salary)

• Lost productivity during ramp-up and training

• Knowledge drain, as institutional know-how walks out the door

• Team disruption and morale impacts

• Customer relationship risks when account-facing employees depart

For specialized or customer-integrated roles, this loss compounds. A trained employee with both technical knowledge and deep integration into your teams and clients is a valuable asset—one not easily replaced. Studies show total turnover costs can exceed 1.5x–2x the employee’s annual salary for mid-level positions.

The Talent War: Competing Beyond Compensation

Across industries, the labor market remains tight. Wage competition has intensified, especially in sectors where every dollar per hour matters—manufacturing, wholesale trade, and financial services among them. Employees are increasingly willing to move for small pay increases, unless they clearly understand the total value of their benefits package.This is where benefit perception and communication become critical. When employees can see and understand the full value of what you provide—healthcare coverage, retirement matching, paid leave, mental health support—they’re less likely to be swayed by modest salary increases elsewhere. In short, benefits visibility equals retention power.

The Data: Better Benefits, Better Retention

Mployer Advisor’s analysis found that companies with highly rated benefits and effective benefits communication experience an average of 27% lower voluntary turnover than their peers. That’s a significant impact—one that directly translates into stronger productivity, reduced recruiting costs, and better workforce stability.How We Measured It: To understand how benefits quality and communication influence retention, Mployer Advisor conducted a cross-industry analysis using a blended methodology:

• Sample Group: Thousands of U.S. employers across key industries were evaluated, each with at least 50 full-time employees.

• Benefit Quality Scoring: Companies were benchmarked using Mployer’s proprietary benefit rating system, which integrates multiple data sources—including public ratings, plan benchmarking data, and employee feedback metrics.

• Communication Effectiveness: We measured not just the quality of benefits offered, but how clearly and frequently those benefits were communicated to employees through internal channels, digital materials, and recognition programs.

• Turnover Tracking: Over a 12-month period, we compared voluntary turnover rates among high-rated employers versus industry averages, focusing on trained, professional employees who had completed at least one year of tenure.The outcome was consistent and striking across every major sector: employers who both provide strong benefits and communicate them effectively retain significantly more of their trained workforce.

What this means in Practice - Let's put these numbers into context:

• Example 1: Mid-Sized Manufacturing Firm (200 Employees) Suppose a manufacturing company employs 200 workers with an annual average salary of $60,000 and a typical voluntary turnover rate of 20%. That’s 40 employees leaving each year. Replacing and retraining them at a conservative cost of 1.5× salary would total $3.6 million annually. With improved benefits communication and recognition, this firm could reduce its turnover by 44%—down to 22 separations a year—saving over $1.6 million annually in direct and indirect costs.

• Example 2: Growth-Stage Tech Company (50 Employees) A 50-person software firm might see a 25% voluntary turnover rate in a competitive labor market. Replacing those 12–13 employees could cost roughly $25,000 each in lost productivity and recruiting, totaling $300,000 per year. By improving benefits visibility and achieving results similar to the 27% national average reduction, the company could retain an additional 3–4 key employees annually—saving $75,000–$100,000 and preserving critical institutional knowledge.

The data and the dollars tell the same story: when employees both receive and recognize valuable benefits, they stay longer. Employers who treat benefits as a strategic investment—not just a line-item cost—achieve stronger retention, higher engagement, and measurable savings year over year.

Why Communication Matters as Much as the Benefits Themselves

Even the most generous benefits package fails to deliver ROI if employees don’t fully understand it. HR leaders often underestimate how little employees know about their coverage and perks. A recent survey found that:

• 46% of employees cannot accurately describe their health plan’s core benefits.

• Only 35% believe their employer communicates benefits “very effectively.”

• Yet 68% say that well-communicated benefits would increase their loyalty to the company.

Communicating benefits is no longer a once-a-year open enrollment exercise. It’s a year-round engagement effort that connects the dots between employee well-being and company investment.

Turning Benefits into a Competitive Advantage

This is where the Mployer Benefit Recognition Program makes the difference.

Through our Employer Benefit Award and recognition system, Mployer provides third-party validation that your benefits are not only competitive—but also worthy of public recognition.

Participating employers receive:

• An unbiased benefits rating benchmarked against industry peers

• A benefit summary report highlighting your strongest advantages

• Award badges and recognition toolkit providing third-party credibility for your website, social media, and recruitment materials

• Ready-to-use social media templates to promote your benefits on LinkedIn and beyond

• A visually striking award poster to display on-site, sparking employee conversations about the value of your benefits

By leveraging Mployer’s independent credibility, employers transform their benefits from a hidden cost center into a visible differentiator—enhancing recruitment, retention, and brand perception simultaneously.

Retention Starts with Recognition

In an era defined by labor shortages and rising turnover costs, the companies that win will be those that treat employee benefits not as an expense, but as a strategic investment.

The data tells the story: organizations that both offer competitive benefits and communicate them effectively enjoy up to half the turnover rates of their peers. Recognition, transparency, and consistent messaging are key to helping employees see the true value of what you provide.

Your workforce is your most valuable asset. Make sure they know how much they’re worth.

Learn more or see if your company qualifies for an Employer Benefit Award by visiting Mployer.

Beyond Salary: How Elite Benefits Drastically Shrink Your Time to Fill (TTF)

October 9, 2025

The modern labor market is defined by choice. In this competitive landscape, the time it takes to fill a critical position—your Time to Fill (TTF)—has become a painful metric. TTF measures the days between when a job is posted and when an offer is accepted, and every extra day costs your business. These are not just abstract numbers; they are tangible losses: decreased productivity from overburdened teams, halted projects, missed revenue targets, and increased recruiting fees (Source 1).

The solution to a high TTF doesn't lie solely in higher base salaries or aggressive sourcing. It lies in your benefits package.

Exceptional benefits are no longer a perk; they are the most efficient talent acquisition strategy to drastically reduce TTF. By treating your benefits package as a competitive differentiator, you can accelerate candidates through the hiring pipeline faster, saving thousands in the process.

The compounding financial cost of every day an essential role remains unfilled. Reducing TTF by just two weeks can save the organization thousands in lost revenue and overhead.

The Attraction Phase: Benefits as a Candidate Magnet

In the crowded digital space, a candidate's first interaction with your company is often filtering for what matters most to their life. This is where your benefits package first accelerates the process.

Filter Efficiency and Signal Quality

Candidates actively use benefit offerings as a primary search filter on major job boards. By offering superior benefits, your role gains instant visibility among highly qualified candidates who are explicitly looking for employer support.

Furthermore, a robust benefits package serves as a powerful signal quality indicator. It immediately tells a prospective hire that your company is stable, healthy, and genuinely employee-first. This signals a positive company culture, immediately making your job more attractive than competitors offering standard, minimal coverage.

High-Value Benefits That Reduce Hesitation

Focusing on benefits that address major life stressors can dramatically shorten a candidate’s initial hesitation and application decision. High-perceived-value benefits like generous Paternity and Maternity Leave policies, comprehensive Mental Health Coverage, and practical Flexible Work Arrangements (Hybrid/Remote) instantly elevate your offer. These concrete; life-changing benefits are far more persuasive than a generic promise of a "competitive salary."

The Conversion Phase: Benefits as a Negotiation Accelerator

Once you find a great candidate, the negotiation phase is where Time to Fill often stalls. Strong benefits act as rocket fuel, accelerating the offer acceptance and minimizing costly, time-consuming back-and-forth.

Reducing Offer Time

When an offer is extended, a truly compelling benefits package often results in candidates accepting the first offer. They don't feel the need for lengthy counter-offers focused solely on base salary because the total value is already overwhelming.

A clear, well-articulated benefits statement in the offer letter minimizes follow-up questions, builds trust, and speeds up the decision-making process. The certainty and value provided by the benefits act as an irresistible closing tool.

Framing the Total Compensation Advantage

To fully leverage this advantage, your HR team must be trained to frame the discussion around Total Compensation Value. Show candidates how elements like a 100% 401(k) match, fully-funded health insurance options, or student loan repayment programs can easily surpass a perceived $5,000 difference in base salary.

When candidates are weighing multiple offers, the company that provides the most security, flexibility, and value outside of the paycheck will significantly shorten the candidate's decision time, often securing the top talent before competitors can react.

The Long-Term Ripple Effect on TTF

The benefits ROI doesn't stop once the offer is signed. A strategic benefits package initiates a powerful, long-term ripple effect that fundamentally lowers your overall vacancy rate and future TTF.

Boosted Employee Referrals

Happy employees are your best and fastest source of talent. When staff are genuinely satisfied with their compensation and benefits (especially high-value items like Sabbatical programs or generous PTO), they become powerful advocates. This satisfaction increases the likelihood of employees referring high-quality candidates, who are typically onboarded faster because of the pre-vetted nature of the relationship. Referral hires are consistently the fastest and cheapest source of talent for any organization.

Lower Turnover Rate

Ultimately, a high TTF is often symptomatic of high employee turnover. Strong benefits increase employee retention, meaning you have fewer open jobs to fill in the first place. Since TTF is calculated using both the vacancy rate and the duration of those vacancies, better benefits effectively tackle both components simultaneously.

Quantifying the Benefits: TTF vs. Public Perception

The impact of your benefits is no longer limited to the candidates you interview; it's public. When candidates research a company, they immediately consult public review platforms like Glassdoor. These platforms link candidate sentiment directly to your hiring efficiency.

The correlation is stark: Companies with higher public benefit ratings significantly outperform their peers in Time to Fill efficiency.

Mployer’s recent analysis of 300 companies and over 2,000 open roles during a 120-day period revealed a critical connection between public sentiment and hiring speed. We compared organizations with exceptionally high Glassdoor benefit ratings (a key proxy for positive external perception) against those with mid-to-lower ratings. The result was a dramatic acceleration in the hiring funnel: for companies with top-tier benefit ratings, the average Time to Fill (TTF) was just 19 days, compared to 27 days for their counterparts—a significant 32% reduction in hiring time. While this trend was most pronounced among smaller organizations (like local businesses to mid-market firms), large global corporations (including Samsung, Morgan Stanley, and GE) demonstrated the same efficiency gain, affirming the universal impact of a strong benefit-based Employer Value Proposition.

Companies with an "Excellent" or "Above Average" benefit rating (4.0+ stars on Glassdoor, for example) consistently report a Time to Fill that is 15-20% shorter than industry peers with "Average" or "Poor" benefit ratings (Source 2). This efficiency is driven by the immediate credibility and trust built before the candidate even submits an application. A strong public rating reduces the need for the candidate to perform extensive due diligence, further accelerating the initial application phase.

Enhanced Employer Brand

A consistently excellent benefits package strengthens your overall Employer Value Proposition (EVP). This enhanced brand, which is now supported by public data, naturally improves all future recruiting efforts by attracting passive candidates who have been watching your company’s reputation grow.

Conclusion: The Investment That Pays for Itself

The takeaway is clear: investing in market-leading benefits doesn't cost money; it saves money by drastically reducing the tangible costs associated with lengthy vacancies, high recruiting fees, and low productivity.

Benefits act as an accelerant across all three critical phases of hiring: they Attract more candidates, convert them faster, and ensure their Retention, fueling a steady stream of future referral hires.

Action Item: Review your current benefits package through the lens of a prospective, top-tier candidate. Where can you add immediate, high-impact value? The race for talent is won by the company that makes the quickest, most compelling offer—and that starts with great benefits.  

To gain a competitive edge and identify your specific TTF acceleration points, benchmark your offerings today. See how your benefits stack up against industry peers through a free, unbiased rating: Visit https://mployeradvisor.com/employer-rating

Sources

  1. Industry benchmarks, based on average daily revenue loss and recruiting overhead.
  1. Modeled data based on aggregate findings from Q2/Q3 2024 Talent Acquisition Reports (e.g., LinkedIn Talent Trends, Glassdoor Economic Research).