LAST REVIEWED Sep 18 2019 6 MIN READ
When considering a potential employer, candidates evaluate the job they’ll have, as well as the entire benefits package—including salary, retirement investment options, health insurance, and other perks. As business owners and HR leaders know, it’s critical to recruit and hire employees with the intent of keeping them in your organization for as long as possible. Employees who leave cost more (recruiting, training, and productivity losses). And, they take valuable knowledge about your company’s history, culture, customers, projects, and protocol with them. A competitive benefits package is not only a powerful recruiting tool; it’s an essential part of a successful employee retention program. Here are four benefits strategies that will entice potential—and existing—employees to stay with your organization:
1. Offer a 401(k), regardless of the size of your business
At large corporations, a 401(k) is a standard employee benefit. Research shows it’s the most requested benefit after healthcare. According to the U.S. Government Accountability Office, only 14% of small businesses offer a 401(k). Presumably, that’s due to excessive paperwork, manual administration, and higher fees associated with typical plans. But thanks to innovative, easy-to- use solutions like Human Interest, small and mid-size businesses are using technology to unlock the potential of the 401(k). Among its customers, Human Interest consistently sees an employee participation rate of more than 90% employee participation. The ability to automate the 401(k) experience makes plans more affordable and means that small business owners no longer need to watch top talent walk away as they mature in their careers because your company doesn’t offer a retirement plan as part of the benefits package. Related articles:
2. Provide financial education
If you make the decision to offer a 401(k), or other financial benefits such as student loan repayment, make sure employees get the most out of what you’re offering. Communicate regularly about the plan, inform employees about their options, and provide investment education so they can make the best decisions possible when it comes to planning for retirement. “There’s an enormous opportunity to educate people and make saving and investing feel approachable for the first time in a way that traditional financial services haven’t been able to do,” said Roger Lee, CEO of Human Interest. Look for investment providers that offer financial and investment education as part of their service, or find a trustworthy financial adviser (preferably one who is a fiduciary) who can conduct informational sessions for employees on a semi-regular basis. Employees won’t fully appreciate the value of the benefits you’re providing if they don’t understand how they can maximize their investment. Related articles:
3. Sponsor health coverage
Employers of all sizes need to consider offering health care benefits, not only due to health care reform but also because health care insurance is a benefit that most employees are looking for. With the option to take an income tax deduction for employer contributions, your organization can reduce the out-of-pocket cost of providing this benefit. When you provide health insurance you’ll also experience a positive return of investing in employee wellness—preventative care is a huge part of keeping employees healthy and coming to work. Related article:
4. Lend a hand with school loans
Students across the United States are graduating from college with enormous debt. In fact, 43.3 million Americans owe nearly $1.3 trillion in student loan debt. As the data indicates, it’s likely that a significant number of your applicants are buried under student loan debt. Organizations that help with student loan repayment contribute to debt pay off in a variety of ways by: providing a specified annual sum; supplying a designated monthly contribution; or, offering an amount based on tenure (e.g., $5,000 at five years). Organizations also have varied approaches in terms of whether the benefit continues for the duration of employment, or if it’s limited to a fixed timeframe (e.g., first two years of employment). One important consideration is that, unlike a 401(k) or health insurance, helping with student loan debt does not yet have tax benefits for employers. Your benefits strategy should be structured around serving employees and providing them with options — about their health, well-being, and financial future. If your offerings provide better, more diverse options, and meets individual needs, you’ll reap the rewards in the top talent you’re able to recruit and retain. (If you’re still not convinced, this very data-driven “How Much Does Employee Turnover Really Cost?” article from Lattice is a great, informative read.)
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The Human Interest Team
We believe that everyone deserves access to a secure financial future, which is why we make it easy to provide a 401(k) to your employees. Human Interest offers a low-cost 401(k) with automated administration, built-in investment education, and integration with leading payroll providers.