As businesses scramble to compete for top talent in the current job market, offering a solid retirement plan distinguishes one employer from the rest.
While incentives such as paid time off, gym memberships, flexible schedules, free meals, and even branded swag are awesome, nothing appeals to skilled talent more than a robust retirement plan.
In the United States, workers typically depend on a 401(k) to grow their nest egg. Yet, according to a 2019 study by the US Bureau of Labor Statistics (BLS), 40% of businesses don’t offer any retirement benefits. The primary barriers employers cite to offering them are high costs and a lack of administrative resources.
So, you’re probably thinking:
“See? Retirement plans are complex and expensive.”
Here’s the thing:
A Pooled Employer Plan (PEP) is a new and more accessible retirement savings alternative that businesses of any size can leverage to entice the best talent.
In this article, we’ll explore:
- The difference between recruiting personnel and acquiring talent
- Why hiring the best talent is vital for your business
- The benefits of employing skilled team members
- The role of retirement plans in talent acquisition
- How to lure top talent to your business
- The evolution of a 401(k) to Pooled Employer Plan (PEP)
Let’s get right to it!
Recruiting Personnel VS Acquiring Talent
Employers often confuse recruitment with acquiring talent because both share a common objective of filling open positions. But that’s where their similarities end.
Recruitment merely fills vacancies. Acquiring talent involves building a winning team to ensure long-term success.
Hiring the best talent for your business forms the foundation for business optimization and growth.
Why Acquiring Top Talent is Vital for Business
As Red Adair so accurately phrased: “If you think it’s expensive to hire a professional, wait until you hire an amateur.”
Finding the best talent is a crucial component of your organization’s business plan and long-term success.
Having talented workers on your team ensures operational efficiency and drives business growth.
Without the right personnel, your business will most likely suffer the devastating effects of poor performance, low productivity, and bad decision-making.
With increasingly crowded markets and a shortage of skilled workers, the need for a competitive edge through hiring top talent has taken on a new urgency.
Advantages of Recruiting Top Talent
Getting talented employees typically costs more, but the expertise and efficiency they bring to the table equates to an exceedingly substantial return on investment.
Optimizes Business Growth
Employees who take full ownership of their work and their place within your company promote superior work efficiency. They stabilize workflows and processes to ensure short-term and long-term growth
Most likely, top talent will already possess the experience and knowledge for the job. This provides your business with the capacity to reach heightened levels of production
Requires Less Supervision
Hiring the best talent allows you to spend more time growing your business instead of constantly hand-holding employees to make sure they’re getting the job done—and done right
Lowers Hiring Costs
The average cost-per-hire is $4,425, according to a study by SHRM. A separate survey discovered that businesses squander an average of $17,000 on every bad hire. Hiring well from the get-go spares you from a vicious hiring-firing cycle that may ultimately ruin your business
Decreases Onboarding Time
Talented new hires assimilate into their new roles and assume responsibilities quicker. Cutting down on onboarding time saves precious human and financial resources
Drives Innovation & Creativity
A talented employee’s quick-thinking and problem-solving skills spur collaboration and innovation.
Reduces Employee Burnout
The shortage of skilled workers has left many businesses understaffed, with employees having to work longer hours. With an efficient team, regular work hours and rest are maintained to prevent stress, exhaustion, and burnout
Enhances Business Reputation
A high employee turnover rate reflects poorly on your company culture and on you as an employer. Conversely, motivated and talented employees that surpass customer expectations boost your brand’s prestige and reputation.
The Role of Retirement Plans in Talent Acquisition
Along with health insurance, access to a retirement plan remains the most attractive benefit for employees actively looking for employment. Furthermore, a retirement benefits package could sway one in three employees to leave their current employer for another.
A retirement plan offers a comfortable life after retirement, allowing retirees to reap the benefits of their years of hard work. It affords opportunities for travel, leisure, recreation, investment, and business. The promise of financial security provides peace of mind for your workers.
As well, retirement plans are an effective employee retention strategy as they are subject to vesting, wherein tenure determines the percentage of employer contributions an employee is entitled to receive.
However, according to the Federal Reserve, only 36% of employees feel confident about their retirement savings. Many workers foresee a retirement crisis where they may have to work a few years longer to avoid financial issues post-retirement. As such, a generous retirement savings plan continues to be a crucial employee benefit for attracting and retaining the best candidates.
How to Attract the Best Talent
Offering perks, incentives, and benefits are a big part of an effective talent acquisition strategy.
While retirement plans initially come at a cost, their long-term advantages and potential contribution to your overall future success greatly outweigh the expense. Not only will you attract more qualified prospects, but they’ll also be more willing to stick with you for the long haul. There’s no greater reward than having a healthy, productive, and satisfied workforce.
Spell out all employee benefits on your career page
Your benefits package is often the deciding factor for top candidates who may be applying with multiple companies. Remember to keep the list current.
It’s a constant race to find the best talent for your business, so offering the right employee benefits can give you an edge over your competition.
Wear your company’s heart on your sleeve
If you want to draw exceptional talent in 2022 and beyond, today’s workforce needs to know that you will look out for them as an employer.
Having a retirement plan shows prospective employees that you care about their future—long after their service to your company is over.
Pooled Employer Plan (PEP): The Evolution of a 401(k)
Included under the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, a Pooled Employer Plan (PEP) is a new and improved version of a 401(k) Multiple Employer Plan (MEP).
Whereas MEPs require participating businesses to be related by industry, association, or geographical location, PEPs allow businesses with no shared commonality to combine their assets into a single blanket plan administered by a Pooled Plan Provider.
PEPs reduce administrative burden and fiduciary liability on employers while promising to be a more cost-effective retirement plan option as they can achieve economies of scale much faster than stand-alone 401(k) plans.
- Finding and hiring the best talent can spell the difference between success and failure for your business, and a retirement plan offering figures prominently in attracting top talent.
- The competition for highly skilled workers has reached a point where not having a retirement plan is no longer an acceptable option.
- Pooled Employer Plans may very well become the standard retirement plan in less than a decade. A PEP future-proofs a key element of your talent acquisition strategy.
With relaxed guidelines, wider coverage, added incentives, and greater protection from liability, a Pooled Employer Plan is the most sensible choice, particularly for small and mid-sized businesses.
Peppermint’s PEPs are an ideal option for companies looking to attract, retain, and motivate top talent.
Compared to traditional 401(k)s, we guarantee:
- Lower Employer Costs
- Less Risk
- Easy Launch
- No Filings, Forms, or Audit Fees