Why It Helps You to Help Your Employees Save for Retirement
It seems like employers have stopped caring about their employees after they leave. Not only do employers generally provide the bare minimum when it comes to benefits, but the inclusion in contracts of pensions or other retirement benefits have been declining sharply for years. On the surface, it makes sense; employers don’t gain profits from employees who aren’t working for them anymore, and the extra expenditure — either for a retired employee receiving a pension or a current employee with a matching 401k — looks like a loss in the accounting books.
However, there are many real and positive reasons employers should start seriously looking back into those old retirement benefits plans. From bringing in the best employees and keeping the best teams to lowering expenditures and directly benefiting you, helping your employees with their eventual retirement is a win for everyone involved — especially the company. Here’s why you should rethink your benefits package to include better retirement plans.
More and more, potential job candidates aren’t signing contracts with companies that offer the highest salaries. Though a fair salary is a strong pull, what really seals the deal is a company’s benefits package. In a recent poll among MetLife employees, 49 percent said that they took the position with MetLife because of the amazing benefits.
Benefits packages may seem daunting to organize, but once you’ve selected the major components, it’s simple and comparatively inexpensive to include the popular programs your current and prospective employees are clamoring for, like retirement savings plans. The most talented and desirable job candidates know they can afford to shop around, so make sure you’re at the top of their lists with a realistic and useful retirement savings plan.
You’ll Retain Employees Longer
The disadvantages to losing any employee, let alone good ones, are almost uncountable. Though it might not seem like a big deal to replace a team member who leaves, especially when you consider that employee will likely be requiring untold raises and bonuses in the future, you really aren’t looking at the big picture. When you allow a high employee turnover rate to continue unchecked, you are adding these problems to your company:
- Increased costs
- Low productivity
- Low morale
- Ineffective workers
- Inability to compete in the market
Recruiting employees drains valuable resources from your company. You are spending inordinate amounts of time monitoring your job ads and interviewing candidates, and you are wasting money by training those employees to become adequate at a job they will likely leave in just a few months.
High staff turnover is a major problem in a company of any size and in any industry, but there are ways to stem the flow and keep the team you love — namely, better benefits. In that same MetLife survey, 60 percent of current employees said that their amazing benefits package was the only reason they continued at their current company. Employees are always looking for the employer that can give them the best offer, and you can keep your current employees happy by offering a benefit not many other companies offer today: retirement savings plans.
The government wants companies to look after their employees, even when those employees are old and gray. Pensions and sufficient 401k plans make sure senior citizens have enough resources to maintain their lifestyles without relying on government aid. However, tax deductions only come with certain retirement plans. Here are a few options and their accompanying tax benefits should you choose to select them:
- Simplified Employee Pensions (SEPs). A flexible and simple plan that requires contributions into an IRA by the business.
- Savings Incentive Match Plan for Employees (SIMPLE). Employees make contributions to their own account (up to a cumulative $12,000 over the course of a year) and the business contributes matching amounts.
If you are a small business — one with fewer than 100 full-time employees — you may be eligible to receive even more tax benefits in the form of credits for 50 percent of the start-up costs of the plans for new employees.
You Can Take Advantage of the Retirement Benefits
When you’re selecting the benefits your company provides employees, you must realize that you yourself are in fact one of your company’s employees. This means you are selecting the options that the company is making available to you. Utilize your company’s status as a business to find better options for your own retirement savings, and keep your employees working happily and efficiently.
Organizing a company-wide retirement savings plan may seem daunting, but in today’s competitive hiring market, you need everything you can get to entice the best workers out there and keep them around for years. What you spend matching 401k contributions or filling pension accounts isn’t just lost money; it’s an investment in a strong future — both for your company and for your hardworking employees.