“Employee engagement” seems to be the go-to catch phrase when it comes to hiring and looking out for employee welfare.
But talking about engagement couldn’t be more timely in the midst of a worldwide phenomenon dubbed The Great Resignation, brought on by the pandemic.
According to the US Bureau of Labor Statistics, there were about 4.2 million resignations across the United States last fall. With the Coronavirus pandemic showing employees just how valued or unvalued they are in the workplace, some decided to take matters into their own hands and either leave their current job or find a new career entirely.
So, as a business owner, how can you show employees that they are valued? How can you leverage employee engagement using the different tools and services available?
We’re here to offer one possible solution but first, let’s dive into employee engagement and what the buzz is all about.
What is employee engagement?
Employee engagement is making sure that your employees have the best possible work conditions so that they are able to perform at their optimal capacity according to their capabilities. This kind of environment empowers your employees to stay committed to your organization’s success, values, and goals while also allowing them to grow and thrive.
By allowing your employees the perfect environment to thrive in, they are able to achieve more and reach their potential, thereby allowing growth to happen.
By protecting your employees’ welfare, you are able to contribute to their sense of financial security and well-being when it comes to their future, allowing them to better focus on the job at hand.
Employee engagement promotes trust, integrity, and commitment between yourself and your employees. Remember that employee engagement isn’t necessarily about employee happiness, but rather, it is how invested your employees are in your organization’s success!
The benefits of engaged employees
While employee engagement can sound like a one-way relationship, it’s not.
By the numbers…
Here are some statistics that show just how much investing in employee engagement can benefit businesses (Source: survey by Harvard Business Review, sponsored by Quantum Workplace, A Winning Approach to Employee Success) :
- 81% of the 984 businesses surveyed strongly agree that highly engaged employees perform better and are more productive than employees with average or low engagement.
- 92% of respondents agree and 72% of these strongly agree that organizations with highly engaged employees have happy customers.
On top of all those research-backed benefits, engaged employees are less likely to resign, and that alone is worth more than its weight in gold. According to a study by Deloitte, “the cost of losing an employee can range from tens of thousands of dollars to 1.5-2x their annual salary.” So, this means that if a disengaged manager earning $90,000 per year resigns, it can cost you anywhere from $135,000 to $180,000. Now, can you imagine how multiple resignations could cost you due to a lack of employee engagement?
It’s statistically proven to bring more good than bad
As you can see, engaged employees are more likely to deliver better customer service and be more productive at work. That means, investing in your employee engagement is actually an investment in improving your customer service and productivity, which can eventually lead to greater ROI and a better bottom line. Happy employees = happy customers = more sales! It’s a simple equation, really.
Imagine creating an environment where your employees are actually excited to go to work – and with good employee engagement programs and employee benefits, it doesn’t have to be a dream!
How do you improve employee engagement?
There are many ways that you can improve employee engagement, but for this article, we’ll focus on a business benefit that many small- to medium-sized businesses have not been able to leverage until now: employee retirement plans!
Why focus on retirement plans?
As a small business owner, you would know that retirement plans are typically out of reach due to their prohibitive costs and high administrative requirements.
However, with the enactment of the 2019 SECURE Act, Pooled Employee Plans (PEPs) were created in order to help small businesses give their employees a retirement plan to help them prepare for and secure their future. We want to put the focus on retirement plans because they are one of the easiest ways companies can show they are invested in employees’ futures.
Aside from business benefits in the form of tax credits, we’d also like to explain the more intangible benefits of getting a PEP as an SMB.
How can a retirement plan help employee engagement?
While it may seem like an extra expense incurred, more than anything else, a retirement plan is essential to employee engagement. As the coronavirus pandemic has shown, more people have reason to be anxious and uncertain about the future. Retirement plans help to alleviate some of those major fears and provide a sense of security, not just for the present but also for the future.
To put it simply, if you’re an SMB owner, setting up a retirement plan for your employees will give them peace of mind in knowing their organization stands by them and is helping them prepare for the long haul. The fewer worries your employees have, the more they can thrive day to day, and the more bandwidth they can dedicate to helping your business grow.
How to get started with retirement plans
There are several kinds of retirement plans available to choose from. Our focus will be on PEPs because:
- Pooled Employer Plans are easily accessible to small-to-medium business owners like yourself!
- Pooled Employer Plans are our “speciality” and we can explain this better than anyone else.
If you’d like to take a more in-depth look at options for retirement plans, we have a free e-book that discusses both the 401k and Pooled Employer Plans.
However, here’s a quick rundown of what a Pooled Employer Plan is:
- It pools funds from several small- and medium-sized businesses in order to open a 401k for that pool.
- The expenses are lower as administrative costs and management fees are divided amongst the pool members.
- Your Pooled Plan Provider (PPP) will take all fiduciary responsibility for your retirement plans. Plus, they’ll also take care of the paperwork and legwork needed to sign up for the actual retirement plan.
- You still have the option of picking between safe harbor options or employee-directed options, just like you would a regular 401k.
- It’s a friendly way to start providing your employees with the peace of mind they deserve!
If you have any questions about PEPs and peppermint’s options, you can visit our page here.
If you’re interested in figuring out how to set up a Pooled Employer Plan for your business, you can read our step-by-step guide here.If you have any questions or want to speak to one of our retirement plan specialists, then you can contact us here.