How you take care of your employees matters. Adding or improving job perks improves worker morale, which lowers turnover and makes your workplace more appealing to prospective candidates.
Retirement plans, in particular, give your employees something to work for: They’re strong incentives to stay with your brand for the duration of one’s career. But they can be expensive -- especially traditional pension plans.
The number of Fortunate 500 companies that offer a traditional pension plan declined from 251 in 1998 to just 34 by 2013. To replace them, some firms chose to offer 401(k) plans, or pension alternatives, but some have done away with retirement programs altogether.
Money is tight, pensions are no longer common, but it’s still worthwhile to offer your staff some kind of retirement-based incentive. What are your options?
Better Retirement Choices in 2017
Below are five of the top practical tips that could give your employees better retirement options … without breaking your budget.
1. Know the available plans.
You aren’t limited to just a pension or annuity plan. Dozens of retirement plan options are available to employers, each of which offers its advantages and disadvantages. For example, a 401(k) plan withdraws pre-tax money from your employees’ paychecks to keep the plan hands-free, and many companies offer an additional employer match to encourage participation. A Simple IRA, on the other hand, is available for small businesses that have fewer than 100 employees and desire an option that won’t require much overhead or paperwork. Many plan contributions are also tax-deductible. The more you know about these plans, the better range of choices you’ll be able to offer your employees.
2. Prioritize information.
Not all employers can support a full-fledged retirement program financially. But you can still help your workers save for retirement. Sponsoring a one-day seminar on the importance of securing retirement income, for example, could help your people find their own resources. You could inform employees about the tax advantages of opening a Roth IRA as early in their lives as possible, or describe how to invest in single-family homes as rental properties. Your team will have something to work for, and they’ll walk away with the information they need to handle the process themselves.
3. Make use of tech.
Most financial service providers these days will offer an online platform or portal for employees to log into and make contributions, monitor growth, and handle any changes to their accounts. The simplicity and security of these platforms will govern how, and how easily, your employees take advantage of your options. They may also entail higher or lower costs, depending on the sophistication of the technology. You’ll want to investigate the selections thoroughly, and experiment with the UI of each platform so you know how easy to use it is.
4. Hire an advisor.
Hiring a professional financial advisor will cost your business some money up front - typically a few thousand dollars for a handful of sessions - but it will be well worth the cost if it means you design a more thoroughly researched, cost-effective retirement program for your employees. Talk to a professional about which options are available to your business, how to structure them, and how much time and money it will take to get them into place. The expert will make recommendations that fit your needs.
5. Know the ROI.
Ultimately, you want your retirement program to benefit your business, so you should know going in how much you’re going to get out of it. Take a survey of your existing employees and find out how important a retirement program is to them (as well as how they might participate if one were to be offered). If your employees aren’t interested, it may not be worth pursuing. On the other hand, it might rank high on their list of desired benefits.
There’s no law that requires your firm to have a formally structured retirement plan in place. But even a simple offering can improve morale, decrease turnover, and attract better talent to your brand.
If you can’t afford to hire a financial advisor or offer retirement options to your employees, at least consider giving them more information about the relevance of a retirement savings plan. Any action you take to secure their future will be beneficial to both them and your company.