While some employees understand the need to set aside money for retirement, many – especially your younger workers – likely do not.
That mindset can perhaps be chalked up to inexperience and immaturity, or that they think they cannot spare the funds.
But you as an employer can help generate more interest in retirement savings through motivation, education and making it relevant to your workers.
As the start of 2016 looms, and with it open 401(k) plan open enrollment, it’s time to start thinking of ways to boost your employee engagement.
The website taxbreakll.com has the following recommendations:
- Conduct fun, simple, engaging training periodically. Investments and financials can be intimidating to employees and, as a result, they can choose to simply avoid the benefit completely.
Work with your 401(k) plan administrator to develop content for 401(k) meetings that simplifies the plan and shows why this benefit is relevant. Have a third party lead the training sessions, so they can create rapport with your staff.
Trust is big when you are talking about employees’ money. One thing, though: too many numbers and statistics will often make your workers’ eyes glaze over.
Keep these meetings simple. Ask that complicated investment questions be asked one-on-one after the meeting.
- Use ongoing, self-learning tools for employees to reference. These videos, usually available from your plan administrator, can be reviewed on their own and during their initial new-hire orientation.
Ensure that these short, simple five- to 10-minute videos answer common questions about 401(k) plans. Show examples for how to enroll, how savings can grow, and how the plan administrator can help them.
- Consider offering auto-enrollment and auto-increase features with your plan. You will want to talk to your plan administrator to see if these options will work for your employees, but since many times people just forget to enroll or aren’t sure where to start, these features can be a great way to increase participation.
Start simple and low with auto-enrollment or auto-increase options. If people feel like the plan is a financial burden, they will opt out. You want deductions to be low enough for them to not miss the money, while still giving them the opportunity to save for long-term needs.
- Your matching helps. Matching contributions for employees can help their money accumulate more rapidly. Doing so also shows your staff that you are concerned about their future. Employer matching can be the influencing factor that causes staff to participate.
- Celebrate retirements. When people retire, celebrate that retirement. This celebration and the subsequent conversations around retirement will help other employees think about their retirement and long-term financial plans.
Since employees are naturally more receptive to ideas from co-workers, this celebration could be the motivator that causes them to get serious about their 401(k) participation and contributions.
Talk to us about the resources available in terms of employee education, possible incentives and activities that would best be targeted to your employees.
The worst thing you can do is just let another year slip by when a number of your employees are too confused or afraid to even consider participating in a 401(k) plan. Instead, give them the gift of knowledge so they can make an informed decision about their future.