Employee benefits packages are great for established companies for both tax and retention purposes. Even if you don't offer the highest salaries in your industry, your employees will be very reluctant to give up a great benefits package that's designed in such a way to minimize hassle and stress. To make the retirement portion of your benefits package as attractive and robust as possible, use these three tips.
Give Your Employees The Ability To Invest In Index Funds As Well As Mutual Funds
The main difference between mutual funds and index funds is that mutual funds are actively managed while index funds are not. While mutual funds are more adept at finding and exploiting a sudden opportunity in the stock market, index funds have the advantage of much lower management fees.
Even if you can't offer your employees a huge amount of fund options because of the costs involved, make sure that you include at least one index fund in the mix. This will especially satisfy younger employees because they're in a better position to pursue small but consistent profits over a long period of time.
Have A Short Grace Period Where You Keep Matching Typical Contributions
Matching the retirement contributions of your employees up to a certain point is a great idea because it incentivizes financial responsibility. But if an employee needs extra money in a particular month for home or auto repairs, frustration from the inability to contribute up to the matching limit is sure to follow.
The small gesture of instituting a short grace period where you'll still make the largest possible contribution even if an employee can't pay as much for a month or two will make you look extremely generous and accommodating. Just make sure that the grace period doesn't set in until the employee contributes up to the matching limit for a considerable amount of months to prevent abuse.
To Minimize Paperwork, Withhold Voluntary Contributions From Employee Paychecks When Asked
Instead of demanding a check for a retirement account every time you send out paychecks, get an IT service to set up your payroll system in such a way that the contributions are automatically deducted unless an employee says otherwise. If an employee decides to make a lower contribution a few days after the paychecks go out, simply give out the money and modify the relevant retirement account. Doing this quickly will impress anyone who's been frustrated in the past by bureaucratic malaise.
For help with the full package, hire professional help, such as Professional Benefit Planners.