Employers may want to look more closely at retirement plans as part of their overall benefits packages because of their positive impact on employee retention.
A 2012 Environics Research Group study found that 92 per cent of SMEemployees ranked workplace savings and retirement plans as an important factor in remaining with their employer, while an earlier study found that 41 per cent would consider moving to an employer that offered one. Interestingly, that same 2012 study found that 69 per cent of SMEexecutives ranked those same plans as only the seventh most important benefit in motivating and retaining employees.
Even workers who have historically made good money have not been great retirement savers and a strong group RSP will help attract and retain workers from all age groups.
Don’t already offer a robust retirement plan? Here are some things to keep in mind.
- Make it about them: Some retirement plan communications can read more like playbooks than explanations. While it is important that employees understand the “how” of the plan, you first have to sell the “why.” Think of it this way: you invest dollars to set up a retirement plan, but a few cents spent in effectively communicating the plan can significantly enhance the return on your investment.
- Offer options: Automatic enrollment, pre-tax and post-tax features, expanded investment options – all of these give the employee an enhanced feeling of control. In an environment where so much of their retirement capital is associated with your company plan, peace of mind comes with giving the employees an enhanced say in how their money is handled.
- Promote the hidden paycheck: Now that you have the employee’s attention, use the company retirement plan to promote the other benefits of employment with your company. With communication about the retirement plan, you can also change the conversation from “wages” to “pay plus.” You can promote the company’s contribution to Social Security, the medical plan, flex time and other benefits that enhance the employee’s life.
In this challenging economic environment, retirement plans have become the foundation of employee benefits. It’s important to take the time to review and evaluate now to prepare for success in the future.