Increased hiring means increased competition among employers to land top-notch candidates. That need to compete has employers looking at incentives that they can add to their compensation packages. Among the options is the tried-and-true 401(k) plan. Businesses of all sizes should seriously consider offering a plan if they are not already doing so. Employee surveys show that a 401(k) plan can make a significant difference.
According to a recent survey released by the Employee Benefit Research Institute (EBRI), some 82% of American workers do not have a lot of confidence that they will be able to retire comfortably. Just 18% feel as though they are in a good position where retirement income is concerned.
At Dallas-based BenefitMall, one of the extra products they offer clients above and beyond payroll processing is an innovative 401(k) retirement solution. The company partners with a respected retirement services provider to offer retirement solutions that make sense to businesses that otherwise would not be able to provide retirement plans to their employees.
According to BenefitMall (http://employers.benefitmall.com/), the top two reasons companies should seriously consider offering 401(k) plans are as follows:
1. Reducing Employee Stress
Setting aside the need to hire new employees for just a minute, it is important to note that the EBRI survey shows that employees are terribly stressed by the idea of not being able to retire with sufficient income. The survey indicated that 30% of the respondents are mentally or emotionally stressed about retirement. An additional 30% admitted to worrying about their finances during working hours, with half of the survey respondents saying they believe their productivity would increase if they were not so worried about their financial situations.
We all know how stress can interfere with job satisfaction and productivity. Therefore, employers should be looking for ways to relieve stress where they can. Employers cannot do anything about situations at home or in their employees’ personal relationships, but they can be involved in helping workers prepare for retirement. A good 401(k) plan can go a long way in that direction.
Having a 401(k) in place instantly helps employees feel more comfortable about retirement. But it also motivates them to make an effort to start saving rather than putting it off for another day. Finally, seeing their accounts grow by way of quarterly statements makes employees feel better about the retirement prospects. It all equates to less stress in the workplace.
2. Attracting New Talent
Whether you like the Affordable Care Act or not, it cannot be denied that the legislation has taken health insurance out of the competition for new talent. Health insurance is now a legal expectation. That makes the 401(k) plan the most important incentive employers now have to offer new hires.
A 401(k) plan tells new hires that a company looks at employees as more than just human capital. It tells them that they will have an opportunity to invest in their own futures while working for that company, even as the company itself is also investing through matching contributions. In short, offering a retirement package to new hires demonstrates a genuine interest in them as people.
It is true that companies have to worry about competitive pay in order to recruit top talent. It is also true that pay is the number one factor employees take into consideration when looking for work. Still, bottom line pay is just the start of competing for workers. Companies have to add benefits to their compensation packages if they want to hire and retain the best they can find. Retirement plans are a big part of that.