Small businesses are increasingly offering retirement plans, closing the benefits gap with larger corporations and expanding financial security to millions of workers. According to new data from payroll and benefits platform Gusto, over 5 million more small-business employees have access to retirement plans today than they did in 2019.
A Broad-Based Shift Across Industries
While white-collar workers continue to benefit the most, industries that have historically lagged in offering 401(k) plans are now catching up. For example, the share of small businesses in the hospitality sector offering retirement plans has tripled, climbing from 4.0% in 2019 to 12.2% in 2026.
The most significant percentage-point increases between 2019 and 2026 were seen in public administration, information, and healthcare. By 2026, the top three sectors for small-business retirement plan adoption were:
1. **Public Administration:** 46.9% (up from 27.6%)
2. **Professional Services:** 44.8% (up from 31.3%)
3. **Finance:** 44.0% (up from 32.3%)
Every one of the 18 sectors tracked by Gusto showed notable growth, including construction (11.7% to 21.3%), retail trade (11.1% to 20.4%), and agriculture (7.8% to 17.3%).
What’s Driving the Trend?
Nich Tremper, a senior economist at Gusto, points to three main factors behind this surge:
The War for Talent: Offering robust benefits is no longer just a corporate luxury; it’s a necessity for small firms trying to attract and retain skilled workers. Howard Telson, who has run a small accounting firm since 2022, noted that his firm consistently hires talent away from larger employers. “At a certain point, I think it becomes almost required if you’re competing against bigger companies who have substantial benefits,” said Telson, who introduced a 401(k) plan about a year and a half ago.
* **State Mandates:** New legislation is forcing the issue. In California, non-exempt businesses with at least one worker must offer the state-facilitated retirement savings program if they don’t already have a qualified plan. Similarly, Delaware now requires employers with at least five W-2 employees to offer a state-backed retirement option.
* **Forward-Thinking Leadership:** More business owners are proactively considering the long-term financial well-being of their teams as a way to mitigate attrition and build company loyalty.
Changing Participation Dynamics
As access expands, so does participation—especially among hourly workers. In 2019, about a third of hourly workers with an available plan participated; by 2026, that number jumped to 45%. Salaried worker participation also grew, albeit more modestly, from 70% to 73%.
Tremper noted that while the *overall* savings rate among small-business employees has slightly declined, this is actually a positive indicator of broader economic inclusion. “Most of this can be attributed to an increase in the share of hourly workers saving for retirement,” Tremper explained. “This is a compositional shift that shows the breadth of new 401(k) access to workers throughout the economy.”
In short, retirement benefits are no longer just a corporate perk. They are becoming a standard expectation across the small-business landscape, reshaping how American workers save for the future.