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For Jeff Falkingham, owner of NHBlack Labs Delivery, providing a 401(k) plan has become more than just an employee benefit. Initially, Falkingham wanted the benefit to help the New Hampshire-based logistics delivery company increase employee retention and recruitment. But he soon realized that the majority of his employees, who are hourly workers and in their early twenties, were lacking the tools and educational resources to build their investment and money management skills.
“I found that in the hourly workforce, they have the desire to have their money work for them, but they don’t have the tools, the education, or knowledge to necessarily do it the right way,” he said.
Because Jeff wants to position his hourly employees for retirement success, he wanted to develop a 401(k) plan that would incentivize them to contribute to their 401(k) accounts. Though 80% of transportation and warehousing workers have access to a retirement benefit plan, only 63% of workers actually participate in them, according to the Bureau of Labor Statistics.
This gap in financial knowledge inspired NHBlack Labs Delivery to create a holistic approach to teaching financial literacy. Falkingham eventually came across Human Interest as a recommended 401(k) provider for Amazon Delivery Service Partners. “A lot of [retirement plan] companies wouldn’t want to talk to you unless you got over 50 employees. But Human Interest was more willing to help me.”
Optimizing a retirement plan to get the maximum benefits
To help his employees take immediate advantage of their Human Interest account, Falkingham strategically selected plan features like automatic enrollment, which enrolls eligible employees into a retirement plan unless they manually opt out. He also utilized employer matching, which allows the employer to match employee contributions up to a certain percentage into a retirement account. These two features, Falkingham reasons, have incentivized employees to participate in—and contribute to—their 401(k) plans.
Falkingham also chose to automatically enroll employees at a 7% deferral rate. A strong deferral rate can actually have a stronger influence on employee savings than an employer match, and that effect can be amplified when combined with a strong employer match. According to a 2021 study, it was found that high deferral rates and high employer match rates encourage equal savings rates across low and high income employees.
Creating a retirement plan was also a seamless experience for Falkingham, who needed extra support and as a result, chose Human Interest’s Concierge service level. The Concierge service level provides a dedicated representative to clients who want help managing their day-to-day 401(k) administrative burdens and fiduciary responsibilities. The service also includes form preparation and nondiscrimination testing and monitoring to ensure that client plans are in compliance.
“Having the Concierge service level was fantastic because the handholding made it pretty easy for me to get going. Human Interest kept me in line and informed [about retirement plan regulations], so that was really helpful for me.”
Investing in employee financial wellness with Human Interest resources
By taking advantage of the financial education resources provided by Human Interest, Falkingham has taught many of his employees the basics of investing, and the power of compound interest. In addition to hosting weekly open discussions around investing and creating a designated Slack channel for his employees to ask questions on financial wellness, Falkingham shares the many free articles, calculators, and guides on the Human Interest Learning Center with his team.
Investing in employees pays off
As a result of NHBlack Labs Delivery’s intentional plan design and continued emphasis on teaching their employees financial wellness, 98% of the company’s employees (as of June 2023) currently contribute to their 401(k) plan, and the company’s attrition rate has gone down to less than double digits. For reference, the average turnover rate in the logistics industry is around 31% according to the Flexe Institute. “The only way you can achieve that is by having a team going in one direction and buying in. We have that.”
As a result of NHBlack Labs Delivery’s intentional plan design and continued emphasis on teaching their employees financial wellness, 98% of the company’s employees (as of June 2023) currently contribute to their 401(k) plan, and the company’s attrition rate has gone down to less than double digits.
Jeff Falkingham, CEO of NHBlack Labs Delivery
When asked about the secret to NHBlack Labs Delivery’s success, Falkingham attributes it to the investment the company puts into its employees. “I think this kind of goes back to the benefits, and how I take care of [my employees],” said Falkingham. “I take care of you, you’re going to take care of the team, and then we get the results.”
Human Interest Inc. is an affordable, full-service 401(k) and 403(b) provider that seeks to make it easy for small and medium-sized businesses to assist their employees with investing for retirement. For more information, please visit humaninterest.com.
The case study is provided for illustrative purposes only and concerns the unique situation of a customer and may not represent the experience, or be applicable, to an individual with similar circumstances. This content does not constitute a recommendation of any product, service, or strategy. Consult an appropriate professional regarding your personal situation prior to making any financial, tax, or legal decision. Human Interest does not provide tax, or legal advice. Past performance or prior success does not guarantee future results.
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