The Power of Employee Benefits and Retirement Plans

Insights

One of the best ways to elevate your enterprise and maximize the value you can create as a business owner is to invest heavily and intelligently in your team. Offering a winning overall compensation package, including a competitive salary and generous benefits, is one surefire way to attract and retain the best talent. They, in turn, will make your company the best version of itself. But understanding how to do that—what to offer and how—can often be challenging.

Below, we’ll explain how you can attract and retain top talent with effective benefits, including especially a retirement plan that helps employees achieve their long-term financial goals.

Elements of Attractive Benefits Packages and Retirement Plans

Offering a strong benefits package starts with understanding what features workers are looking for. It’s something of a cliche at this point that most workers are more interested in benefits that make a material impact on their lives rather than perks (i.e., a ping-pong table in a break room).

But what exactly are they looking for? In most cases, it’s health insurance, paid time off both regularly (i.e., sick and vacation days) and in special situations (i.e., parental leave), and support for retirement savings. The last one is arguably the most impactful, as tax-advantaged vehicles like 401(k)s are some of the best ways for employees to build and maintain generational wealth.

Companies with excellent benefits packages often feature generous contribution matching for retirement savings. For example, companies that U.S. News highlighted for their benefits:

• Boeing offers dollar-for-dollar matching on 401(k) contributions up to 10% of nonunion employees’ salaries, vested immediately, along with matching student loan payments.
• Citigroup offers dollar-for-dollar matching on up to 6% of employees’ salaries, vested after 3 years, and contributions up to 2% without employee investments in some cases.
• Qualcomm offers a graduated scheme that matches the first $1,500 contribution 100%, then tapers off to lower percentages for higher amounts contributed up to the IRS limit.

While the packages differ slightly, a common theme across these plans is dollar-for-dollar (or 100%) matching on contributions up to a limit. This can be contrasted with other companies that provide partial matching on contributions (i.e., 75¢ for each $1 up to 6% of salary).

Understanding What Matters Most to Your Employees (and Applicants)

Employees are unique individuals with particular desires and concerns, and you shouldn’t assume that every single prospect or hire wants the exact same things when it comes to their benefits. It’s important to research the specific wants of your applicant and employee pool to determine what kinds of benefits you’ll offer—and how to communicate them to your staff.

A study conducted by the Employee Benefit Research Institute (EBRI) found that age is a major factor in which benefits workers value the most. Namely, employees aged 21 – 34 were most concerned about monthly bills, whereas employees aged 50 – 64 were primarily concerned about saving enough for retirement. In practice, businesses with younger workforces might prioritize features like health insurance with gym reimbursements, whereas those with older average employees might place more focus on retirement plans over health and wellness.

Challenges to Implementing Effective Retirement Benefits

Another important thing to consider is how easy your selected benefits package will be to execute and whether it could potentially create challenges for your business. According to The Pew Charitable Trusts, small businesses face challenges in offering retirement benefits. This is because high fees and other cost concerns can make it difficult for employers to afford startup and other expenses, like administrative and compliance services. In addition, these and other fees can be passed on to plan participants, negatively impacting the amount they can earn.

This is why it’s critical for businesses of all sizes—but especially growing enterprises—to think carefully about their benefits packages. Working with a quality financial advisor is one of the best ways to maximize plan effectiveness for employees and employers, for everyone’s benefit.

Working with a financial advisor can optimize the plans you provide and the overall financial well-being of your company so that you’re well-positioned to support your employees.

How to Lure the Best Talent with Optimal Financial Strategies

Companies looking to attract, hire, and retain the best talent should be offering prospects the best overall compensation packages, and benefits are an important part of what makes an offer attractive. Savvy workers with offers from multiple companies will be comparing both their base salaries and any additional benefits they’ll receive. Offering matching contributions is, in effect, offering additional pay to employees. You’ll want to make it as effective as it possibly can be.

You’ll also want to make that money, and information about it, as easy as possible to access.

Communication is absolutely essential. A well-documented phenomenon is that employees don’t care about their benefits—or, at least, they don’t care about them until they have to. The Society for Human Resource Management (SHRM) recommends actively engaging employees who show disinterest in their benefits, addressing their concerns, and streamlining messaging to weed out highly technical “noninformation” that only a “benefits wonk” would appreciate.

Supercharge Your Benefits Package with Tomoro

Tomoro is committed to helping businesses get the most out of their financial operations. That includes leveraging their funds and the market at large to offer competitive packages to their superstar candidates and employees. We’ll work with you to develop retirement and other benefits that make workers want to make your company the best version of itself.
To learn more about how we can help, get in touch today.