With companies seeking the “perfect candidate” to fill each job requisition, benefits usually are the last item discussed in the recruitment process. Why is that? When we think about benefits, we think of health care insurance and the vacation days offered. Why aren’t companies marketing their 401(k) plan as a top benefit to their package? Retirement is multi-generationally eminent. Is the 401(k) plan getting lost within the benefits package?
Glen Colwell, a registered representative specializing in fiduciary compliance and measureable retirement outcomes, advises both non- profit and for profits and assists them with putting together their 401(k), ESOP, 403(b), profit sharing and other plans by helping their employees become retirement ready.
On LinkedIn, Colwell discusses how the 401(k) plan can be used to attract and retain employees. Many people look at their jobs as a ways and means to financial security, which can be stressful. Colwell states “Some employee stresses are: employees living pay check to paycheck, no emergency funds, delaying medical treatments because of costs, having to borrow against their 401(k) when that should be their long term savings and these things are creating stressful situations and this creates lack of productivity and other stresses to the business while at work.” Colwell’s approach to HR and Recruiting professionals is, “If there is a such a ‘war’ to find the best employees; why not use the 401(k) plan to attract the best employees, when the average employee is financially stressed out?”
There are many variables as well. Colwell says, “Lack of financial literacy is a huge issue and there’s a lack of understanding of savings vs. spending.” Also, “Financial Wellness is a topic that has been on employers minds and it is growing. There are financial stresses out there that are causing issues at the employer level.”
Colwell notes, “There needs to be conversation with new employees about their new benefits package, including the 401(k) plan. This can attract and bring in qualified talent if the company can translate how amazing their 401(k) plan is. These kinds of plans, with great resources and tools, are to the benefit of the employee and the employer. The right plans put in place by the employer, the employer who takes the time to implement something fantastic and worthy, will help attract the best kind of employee and the right employer will also keep an employee in their workforce who appreciates this benefit because they are vested and they know their money is safe.”
Because of so many other components of the benefits package are on the forefront, the 401(k) plan has not been the biggest selling point lately. Colwell notes, “If the 401(k) has been used as a key in getting companies to onboard [talent], it should be an attractive plan. So, there have been some reasons why companies aren’t having these conversations, at least not in depth right now; there are other issues that have been the concern lately:
1. There has been such a huge focus on the ACA over the last couple of years and this took the focus off the 401(k) plan that employers offer;
2. In 2012 there was a fee disclosure regulation and there have been many larger employer lawsuits that have come into play as a result because fees weren’t being disclosed, this has taken the focus off of the 401(k) benefit for the actual user, the employee and their need to replace income in their retirement years.
This has really impacted the 401(k) benefit in the employee benefit package.
The real conversation should be about how [we] can get the employee ready for retirement instead of working beyond their years, not that older generations shouldn’t be in the workplace, of course, that’s a benefit, but we would want them there because they want to be, not because they cannot retire due to lack of a retirement planning focus.”
The 401(k) plan can help persuade new talent to sign on with a new company and persuade others from leaving. Colwell says, “Why aren’t organizations talking about what their existing employees have accomplished regarding average employee savings’ balance successes in replacing their income for retirement years with the tools and advice by the Organization’s Retirement Plan providers? All of this information is readily available in the right kinds of built and customized 401(k) financial plans and should be reviewed during the annual Plan review.” He adds, “Employers are trying to both attract and retain employees. Why is it that employers aren’t using the 401k within their benefits package as a vehicle to why employees should both stay with the company as well as onboard with a company?”
August 2017, Colwell authored an article on LinkedIn, Does Your Retirement Plan Attract (and Retain) Great Employees … or Repel Them? It gives a hearty look at the “Critical Parts” to a healthy retirement plan. Retirement is a huge part of why we even work as many years as we do. Colwell mentions, “They want a retirement plan with lots of options, and the opportunity to really grow their money. The right plan is a strong incentive.”
To end, it is the hope that once again the 401(k) plan of a well-constructed benefits package can be one of the driving factors to both attract and retain workplace talent. In Colwell’s article, he says “The economy of the past decade has left employers and employees alike with a decided sense of unease about the future. One thing is certain, though: a vast majority of workers still hope to retire someday. On a cumulative basis, employers hope they do, too.”
Glen Colwell is a registered representative offering advisory services through AdviseMe National Advisors, a Registered Investment Advisor, and also offers securities and additional advisory services through Independent Financial Group, LLC, a registered broker-dealer and investment advisor, member FINRA/SIPC. AdviseMe National Advisors and Independent Financial Group are unaffiliated entities
Powered by WPeMatico