Every manager and business owner knows that engaged employees are critical to company success.
As the Harvard Business Review notes, "a growing body of research has demonstrated that having a highly engaged workforce not only maximizes a company's investment in human capital and improves productivity, but it can also significantly reduce costs, such as turnover, that directly impact the bottom line."
When designed strategically and managed with care, your employee retirement plan motivates your employees to invest in your company's success and remain with the company longer. Your plan can also help you with employee recruitment efforts.
In our last post, we examined how to evaluate your employee retirement plan's performance, and how education and communication are critical to a successful plan. In this post, we're examining how to improve your retirement plan.
Improve Your Employee Retirement Plan With These 3 Tips
Creating an employee retirement plan that drives employee retention efforts takes commitment. Follow these three tips to improve your results:
- Focus On Value: The more value you include for your employees, the more likely they are to participate in your plan and feel satisfied. Consider including financial advisory services along with your plan. Also, set up a committee to oversee plan compliance, investment strategies and policies. Finally, work with your advisor to maximize the tax advantages that both your employees and your company receive from your plan.
- Communication Is Critical: High levels of awareness about your plan and the benefits of contributing drive high participation rates and levels of satisfaction. Provide workshops, informational materials and ongoing education about the benefits of your plan and of saving for retirement in general. Take the time to work with your employees one-on-one to make sure they truly understand all of the materials. It may be helpful to meet with employees and break down how much would come out of every paycheck and what kind of retirement savings that would yield. If an eligible employee opts not to participate in the plan, follow up with them directly to make sure they have all the information they need.
- Establish A Formal Enrollment Process: Once a plan has been set up, it's easy to accidentally overlook newer employees when they become eligible to participate. Set reminders to follow up with employees two months from their eligibility date to start educating them on the value of the program. Spend as much time with newly eligible and soon-to-be eligible employees as you did with your other employees when you were implementing the plan.
Another tactic to consider is setting your employee 401(k) plan to auto-enroll. You should be able to achieve higher participation rates by having employees opt-out rather than opt-in.
Don't leave your employee retirement plan at risk for failure. Follow the tips above to provide your employees the value they deserve and you're more likely to keep them motivated and engaged.
Discover how to build a retirement plan that drives employee retention and recruitment by viewing our webinar, Is Your 401(k) Plan Failing Your Employees?
