Is your employee benefits plan attracting and retaining top talent? “A clear link between better benefits and a company’s ability to attract and retain employees” exists, according to a recent study by Towers Watson.
It’s important to regularly evaluate your organization’s 401(k) plan. The wrong plan may cause great employees to leave and potential hires to rule your company out.
Here are five ways to determine whether your 401(k) plan is a problem:
1) Ask about the 401(k) plan in exit interviews: When your HR team conducts exit interviews or surveys, ask people about their opinion of the 401(k) plan and whether it was a factor in deciding to leave the company.
2) Solicit feedback from retired employees: Find out if they feel well rewarded by the company’s retirement benefits. If yes, ask retired employees for testimonials to share with new hires. If no, ask for additional feedback and suggestions for improving the plan.
3) Compare your benefits package to those of your top competitors: How do your 401(k) plan and other employee benefits measure up in terms of the cost to employees and the quality of the benefits?
4) Look for trends in 401(k) plan participation: Your HR manager should look at how many new employees sign up for your 401(k) plan within three months of becoming eligible. Of those who sign up, how many are still contributing to the plan after a year? If you’re seeing a drop in initial enrollment or ongoing participation, it calls for additional investigation. If you’re in the middle of a company merger or layoffs, then of course you should expect a proportional decrease in participation.
5) Pay attention to what new and current employees say about the plan: Your HR team should keep track of the number and types of questions employees ask during the on-boarding process. Here are some questions and statements that could indicate problems with your current plan:
- “I see you have a lot of benefits here at the firm, but I’m not sure what options are best for my family.”
- “How do I enroll? This retirement plan is more difficult to set up than my last employer’s plan.”
- “Could I have the profit-sharing contribution as a bonus or pay increase, instead of putting it in the 401(k)?”
- “If I roll funds from a previous plan into the 401(k) right away, would I be able to get a loan on those funds?”
- “I don’t plan to roll over funds into your plan, since it doesn’t seem as good as my past firm’s retirement plan.”
- “I don’t see company retirement plans as a good investment, so I will just take the pay now.”
There is a connection between retention and employee benefits; use this connection to your advantage. With these five tactics, you’ll learn more about what your employees are looking for in a 401(k) plan, and be able to apply those lessons moving forward.
Learn more about employee benefits and the impact they have on your organization by reading our free e-book, Make Retirement Benefits Your Secret Weapon For Employee Retention.
