How Retirement Plans Can Benefit Recruiting & Employee Retention
In today’s HR marketplace, recruiting top talent isn’t enough. When you’ve built a solid team, the last thing you need is to start over if one of your key players jumps ship. Companies are working harder than ever to retain their employees.
While attractive salary, bonus, and commission programs do catch a person’s eye, companies shouldn’t overlook the benefits of a comprehensive 401K. It is a great benefit a company can offer, and it could mean that, without it, you may lose good talent.
What Your Retirement Plan Says About You
For larger companies it goes without saying that a new hire’s benefit package will likely include some form of retirement savings plan. However, for smaller companies and start-ups, offering a 401K can be a telling commitment to their employees.
Newer companies that attempt to attract top employees may find it difficult to compete with larger, established brands. However, a 401K retirement plan is a cost-effective way to prove that that you believe in investing in both your business and your team. In fact, investigating tax deferred savings and retirement options could end up saving your company money in the long-run, while offering the competitive edge you need in recruitment that rivals larger businesses.
The Current Retirement Predicament
As companies welcome a new generation to the workforce, these colleagues are bringing with them a realism of their own parents’ retirement predicaments. A report released by Deloitte paints a disconcerting picture of an elder generation ill prepared for retirement. According to the study, only 3 in 10 people feel financially prepared to retire and 58% surveyed admitted to not having a formal retirement savings and income plan in place. Your newest team members are painfully aware of this dire situation, and are looking to establish their own long-term financial strategy that will ensure future financial security – enter the 401K.
The National Institute on Retirement Security confirmed that for most Americans, the “retirement crisis” is diminishing the American dream of retiring comfortably (if at all). Over 90% of working households that have some sort of IRA or savings don’t even meet conservative retirement targets for their age and income. Without a substantial nest egg to fortify a fixed income, the outlook on retirement becomes a worrisome topic centered around the care and financial well-being of aging relatives.
As this new workforce witnesses first-hand the challenges that baby boomers face, they themselves have become more focused on planning for retirement earlier in their career. It’s important that HR departments support hiring initiatives with comprehensive retirement programs to offer top talent an incentive to work on their team, and retain their services as they ascend in their positions.
Fortunately for employers, 401K retirement packages have become more affordable in recent years. And, while it’s commonplace to find businesses offering retirement options to employees, it’s becoming increasingly more competitive as a way to entice seasoned pros from one company to another. Therefore, it’s not enough to offer a matching plan, your program needs to show significant interest growth compounded over the course of a career.
Bloomberg recently released a list ranking the 401K plans of 250 large companies. These stats have enabled employees to see how their own plans rated against others for the first time. The rankings are confirmation that 401Ks are crucial in retaining as well as recruiting employees, and that fortifying your program is key to maintaining a solid team.
An Asset to HR
As an air of uncertainty lingers over the state of Social Security, retirement plans through the workplace are the new asset companies must rely on. While not the primary decision maker for general recruitment, a nest egg savings plan can help determine whether a mid-level employee comes on board or if a seasoned pro might be enticed by a competitor.
Netchex benefits outsourcing can help you assemble the right program for your company. With an array of options, investment opportunities with blue-chip companies, and interest baring accounts that accrue annually, our experts will help you navigate complex programs to find a cost-effective solution for your business. Our services protect your assets through money management, tax-deferred savings, and our brokerage services offer a quick and easy way for your employees to save for retirement.
“It is critical with government regulation and compliance for employers to take the time to properly design a retirement plan that fits the needs of their business, whether starting a new plan or having an annual review done with an existing plan,” says Rob Masson, Director of 401(k). “Netchex retirement plan team of experts can assist you in designing a plan that is most suitable for your organization.”