According to the recent Jobvite’s Recruiter Nation Survey, after Healthcare, 401(k)s are considered the most valuable benefit to recruit and retain employees. Providing retirement benefits to your employees, such as 401(k) plans, is an important step in recruiting, retaining and promoting employee wellness.
- Recruitment and retention: Recent trends demonstrate that recruiting for new employees is becoming more competitive. According to the 2018 Recruiter Nation Survey, 74% of recruiters believe hiring will become more competitive over the next year1. As employee recruitment becomes more competitive, it is up to the hiring organizations to set themselves apart from the pack to attract the best talent. Offering a 401(k) plan demonstrates that an organization is invested in the long-term outlook of its employees and of the organization.
- Morale Boost: Providing a 401(k) to employees improves employee morale by reducing financial stress. A Study Conducted by the Social Market Foundation revealed that worker productivity increased by nearly 20% when morale was boosted through employer investment4. In addition to addressing financial stress, a 401(k) match or Profit-Sharing feature shows employees that their employer is willing to invest its people.
- Tax Benefits: 401(k) plans may offer tax advantages to both employees and employers. Employees can contribute tax-deferred money into the plan which lowers their current tax liability. That money will not be taxed until the employee takes a distribution, most likely in retirement. Employers have tax incentives with 401(k) plans as well. Contributions made to employees through a matching and/or profit-sharing contribution can be deducted as business expense.
Innovative Investment Fiduciaries is a Registered Investment Advisory firm that specializes in retirement plan consulting. Innovative’s talented team of tax and financial professionals work closely with plan sponsors to provide the best offerings for your organization and employees. Let Innovative perform a complimentary review of your plan by contacting our retirement planning team here.
- 12018 Recruiter Nation Survey https://www.jobvite.com/wp-content/uploads/2018/11/2018-Recruiter-Nation-Study.pdf
- 2Capital One Survey http://press.capitalone.com/phoenix.zhtml?c=251626&p=irol-newsarticle&ID=2285440
- 3National Institute of Retirement Security https://www.nirsonline.org/2018/02/new-research-finds-95-percent-of-millennials-not-saving-adequately-for-retirement/
- 4The Social Market Foundation Survey http://www.smf.co.uk/wp-content/uploads/2015/10/Social-Market-Foundation-Publication-Briefing-CAGE-4-Are-happy-workers-more-productive-281015.pdf#page=9
- IRS 401(k) Plan Overview https://www.irs.gov/retirement-plans/plan-sponsor/401k-plan-overview
