How Retirement Benefits Affect Your Employee Retention Strategy

The “great resignation” may feel like a buzzword, but few companies have dodged the effects of this exodus. If it feels more difficult than ever to keep quality talent, you’re not alone. Over a third of employers in a late-2021 survey conducted by nonprofit Transamerica Institute cited employee retention and turnover as a major concern.¹

Fortunately, your key to better retention might be right in front of you:

It’s time to look at your retirement benefits.

While various factors lead workers to seek new employment, offering competitive pay and quality benefits are key to both attracting and keeping your employees.

Retirement benefits, like a 401(k) plan, are an essential part of your company’s employee retention strategy–and you can leverage this superpower to keep workers around.

Retirement & Retention: What’s The Link?

In 2022, it may be difficult to imagine a benefits package without a retirement plan. 80% of employees strongly or somewhat agree that retirement benefits are a major factor in job offer decisions.¹

However, not all companies offer this perk.

Just over half of employers in a late-2021 Transamerica Institute study offered an employee-funded retirement plan, such as a 401(k). Some employers in the study offered more than one type of plan, and 439 offered none. Small businesses were the most likely to forego a retirement plan.¹

When you provide a quality retirement plan to your employees, you show that you’re listening to their needs and prioritizing their financial security. This benefit also helps you stand out from other employers as you compete for talent. Transamerica found that 74% of employers marked retirement plans as very or somewhat important in both attracting and retaining employees.

Benefits packages are part of complete job offers. Employees consider factors like retirement, paid time off, and medical insurance, as well as perks like remote work and annual bonuses. Retaining employees is all about offering what today’s employees are looking for, along with extra features to compete.

Boost Your Retirement Benefits

While your retirement plan may draw employees in, you’ll want to remember that other companies offer comparable plans. This is when it pays to go the extra mile. There are steps you can take to bring your retirement plan to the next level (and make it a better selling point!).

Offer an employee match

Businesses that match 401(k) contributions are putting even more money in their employees’ pockets, now and in the future. Prospective employees notice whether you’re offering a match, and current employees certainly appreciate it.

Consider profit sharing.

If your business chooses a profit sharing 401(k) plan, you’ll contribute portions of your pre-tax profits to your employees’ retirement accounts. This is another way that you can bolster your employees’ retirement savings (and motivate them throughout the year!)

Ask employees what they need.

The best way to support your employees doesn’t need to be a mystery. Often, you just need to ask them what they’re looking for in a retirement plan.

There’s no perfect way to offer retirement benefits, so it’s important to work with your financial team to set up a package that checks your boxes.

Help Employees Get More Out of Their Retirement Plans

Often, simply offering a retirement plan isn’t enough. There are two main ways you can help your employees get more out of their accounts: Choosing the right plan and providing employee support.

Find The Right Plan

Finding the best retirement plan for your employees is central to your employee retention strategy. There are a few steps that your company can take to find a 401(k) or other retirement plan that fits your employees’ needs.

Consider the size of your business.

If you have a small or medium-sized business, an enterprise 401(k) plan might not be what your company is looking for. Find a provider that supports businesses of your size. That way, you and your employees will have access to the tools and support needed to manage your accounts.

Look for self-service tools.

Quick access to information takes a lot of stress out of managing a retirement account. Prioritizing retirement providers that offer self-service knowledge bases and tools like retirement calculators empowers your employees to make choices for their futures.

Ask questions.

When in doubt, ask. Taking time to shop around and ask questions will help you find a retirement provider that matches your priorities.

Remember, there is no one-size-fits-all retirement plan. You know your business and employees better than anyone, and you have the power to find a retirement plan that fulfills your expectations.

Support Employee Participation

Are you making it easy for your team to participate in their retirement plan? It’s possible that your employees range from new college graduates to seasoned investors. So, providing support can be invaluable for anyone looking for extra assistance.

Simplify account setup.

When it comes to benefits, your employees want a stress-free onboarding experience. The more support you can provide during account setup, the better. However, keep in mind that some team members will prefer to enroll in their accounts on their own.

Encourage contribution.

Of the employees who have access to a 401(k) or similar plan, 77% participate. There may be steps you can take to boost participation at your own company. Ensure that your employees are aware of this retirement benefit, as well as your company match. Your plan provider may also have tools to help employees calculate how much to contribute.

Every employee will make their own decisions about whether to participate in a retirement plan and how much of their paycheck to contribute. However, having support available helps your team make the best possible decisions for their futures.

As employers work to retain (and attract!) quality talent, a retirement plan remains a valuable part of an employee benefits package–and an employee retention strategy. ePlan Services is here to help you maintain a retirement plan that fits your business needs. With a suite of online tools and education, we provide full-service retirement plans to small and medium-sized businesses. Contact us today to get a free quote.

¹“Emerging From the COVID-19 Pandemic: The Employer’s Perspective,” nonprofit Transamerica Institute, August 2022

This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up-to-date.