In Tight Job Market, Retirement Benefits Seen as “Must-Have” to Recruit and Retain Talent; Yet 93 Percent of Small Businesses Are Unprepared to Make Benefit Decisions
Exceptional employees help support a small-business owner’s success. With low unemployment rates and fierce competition for workers, steady work and compensation are not always enough to attract and retain the best talent. New research released from Lincoln Financial Group reveals that more than half of small business owners see retirement benefits as a “must-have” to retain employees and set them up for long-term success; but as they consider adding new benefits, 93 percent feel unprepared to make decisions.
Retirement benefits seen as a “must-have” to attract & retain talent yet 93% of small businesses are unprepared to make decisions, reveals @lincolnfingroup study. Check out these tips on how to get prepared & help employees secure their #financial futures
Seven in ten small business employees are concerned about planning for their retirement. And a workplace savings plan is the most effective way to get people to start to save for retirement. That means workers across America are looking to small business owners to provide the benefits they need to secure their financial futures – yet only 42 percent of small businesses offer retirement benefits.
“The good news is that small business owners recognize the importance of offering retirement benefits, but there are still some barriers preventing them from taking action,” said Jamie Ohl, executive vice president, president of Retirement Plan Services, Lincoln Financial Group. “Offering a comprehensive plan doesn’t have to be complicated — it only takes a conversation with a financial advisor and a few simple decisions for a small business owner to set up a new plan or enhance the one they offer today.”
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The following tips can help small business owners feel more prepared as they approach decisions about retirement benefits and help their employee secure their financial futures.
Tip 1: Gain Advantage with Financial Professionals
Many small business owners feel unqualified to choose the best-fit and best-cost benefits and providers for their employees.5 And they often lack the resources — both financial and personnel — that larger competitors may have available to select and administer benefits. Lincoln Financial’s study revealed that when they consider offering a new benefit, 69 percent of small business owners are concerned about not having the resources to administer additional benefits.
Meeting with a financial professional can be a simple yet impactful step in the benefits decision-making process. A financial advisor can ask the right questions and find the right answers to help small business owners identify the best-fit solutions and partners in the marketplace. Small business owners can lean on their financial professionals or plan providers for their expertise on how benefits work, tax implications and plan design, as well as tools to help evaluate their current benefits and assign value to new benefits. Financial professionals or plan providers can also assist small business owners with administrative capabilities and robust employee education.
“Financial advisors and plan providers like Lincoln can help by serving as a consultative partner to small business owners — helping them understand solutions, make the right selections based on employees’ needs and helping them educate their employees,” said Ohl.
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Tip 2: Education Drives Employee Engagement
Employee retention and preparing employees for the future are the two most important reasons to employers when it comes to why they offer retirement benefits.6 However, small business owners identified that employee participation is among their biggest challenge when it comes to managing their retirement benefits.
The key to employee engagement and participation is outcome-focused education that encourages employees to understand the benefits of the plan and take appropriate action. Seventy-nine percent of retirement plan participants wish they had a better understanding of the elements of saving for retirement in their workplace retirement plans.7 And only 42 percent of participants say they are saving as much as they think they should. Lincoln Financial has several calculators available on its website that can help savers understand the impact that a small change today can have a big impact tomorrow.
Another way that Lincoln Financial is making it easier for participants to save is through YourPath — a series of customized target date portfolios managed along multiple risk-based paths. This supports a more personalized investment approach based on an individual’s financial circumstances and risk tolerance. YourPath is available to employers of all sizes, making it easy for small business owners to help their employees reach their retirement goals.
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