In a world where the longevity of social security is coming into question, potential employees in the job hunt pay special attention to a company's 401(k) benefits. In fact, according to a recent study by Glassdoor, 79% of employees would prefer additional benefits to a pay increase. In order to remain a competitive part of the talent acquisition market, offering your employees the opportunity to enroll in a 401k plan is becoming increasingly important.
Take a look at a few of the reasons why investing in a 401k plan for your employees can be beneficial both for them and for you as an employer:
Shows you value your employees. Offering any sort of benefits to your employees shows you value them individually, as well as what they have to offer to your company. When your employees see they are valued, their job satisfaction increases. As a result, research has shown that happy employees are 12% more productive. Offering a 401k plan can pay off in employee productivity increases.
Encourages employee loyalty. Not only do your employees know they're valued, but if you offer matching you can set up a 401k vesting schedule, which ensures your employees have to work for you for a certain number of years before your matching applies. This encourages your employees to stick around and saves you money on those employees who leave early. Additionally, good benefits in general dissuade employees from looking outside your company for more beneficial employment.
Allows you to compete with other companies. You risk losing strong candidates to other companies if you don't offer a 401k retirement plan. According to Capital One, only 1 in 4 companies with 50 or fewer employees even offers a 401k plan. Providing a 401k plan puts you ahead of the competition and allows you to recruit and retain the best employees.
Makes you eligible for tax breaks. Company contributions into employees' 401k accounts are tax deductible. Some companies are concerned about the initiation and maintenance fees of a 401k plan, but tax break eligibility can easily pay these off.
Contributes to the economy. Self-sufficiency is a building block of a strong economy, and helping your employees have the tools they need to retire comfortably contributes to that strength. Additionally, if you offer a 401k plan as an employer you too are eligible to participate! You can contribute to your own 401k plan, match your own contributions, and when you're ready to retire you'll have a 401k in your name ready to go. It's like giving yourself free money.
Are you thinking about offering 401k benefits but don't know where to start? Good news: at Zamp HR, we make offering 401k benefits to your employees easy. We leverage our overall size to obtain favorable plan pricing that businesses generally can't obtain on their own. Our plan is easily customized, enrollment couldn't be simpler, and our HR team is here to help you every step of the way.