The pandemic forced many businesses to close after their revenues went down due to low sales. The situation resulted in the lay-off of workers who had to rely on unemployment benefits from the government.
After the situation improved, many businesses found it challenging to find employees after they reopened. To make their job offer appealing, companies had to offer better compensation and benefits to potential candidates. It is also advisable for companies to look after the welfare of their employees.
And one way for them to accomplish this is by helping them prepare for their future. Assisting employees to prepare for their future will demonstrate to them that the business wants them to become financially secure. Here’s how companies can help their employees prepare for their financial security.
Offer Reliable Retirement Information
Businesses should provide their employees with reliable information when it comes to retirement. They can assign their human resources (HR) department to handle retirement discussions with their employees. This allows them to provide guidance about their retirement finances and ensure they have enough funds when they retire.
Another option for businesses is to work with a certified financial planner who can provide advice to their employees. The financial professional can help employees create a financial goal for their retirement. They can also assist their employees when they start making their plans in achieving their financial goals.
Provide Compensation that Promotes Investments
With around 11 million jobs available in the market, businesses have to offer compensation that’s appealing to potential employees. If companies want to take care of the welfare of their employees, they should provide compensation that allows them to invest in their future.
Businesses should work on providing a wage that allows employees to set aside money for investments. If they have millennials in their workforce, they should factor in the student loans they have to pay. Even though it will affect their profits, providing higher than minimum wage will inspire their employees to work hard. So, providing compensation that allows employees to make investments also increases their productivity and encourages them to stay with the business.
Businesses can also show their employees the benefits of investing by working with a company offering defined benefit services. The company should have professionals who can deliver the best returns from the investment of businesses. It should design an investment strategy suitable to the needs of the business.
Educate Employees About Saving
Providing notable compensation to employees does not always mean the employees will use the extra funds to start a savings account. So, it’s a good idea for businesses to educate their employees about the importance of setting up a savings account. They should highlight its benefits and how the employees can reap the rewards of saving extra funds for their future.
Businesses can use the pandemic as an example since many non-retired Americans found it challenging to meet their financial goals due to the health crisis. Highlighting this situation can make them realize the importance of setting aside funds for a rainy day. Additionally, businesses can highlight the importance of preparing for their retirement.
Encourage Employees to Increase Contributions
Businesses can also encourage their employees to increase their contributions for their retirement. The default participation rate is too low that it cannot provide significant results. Companies should inform their employees about the retirement plan they established for them. They should also inform the employees about the potential returns if they increase their contributions.
More often, employees do not increase their contributions since they have no idea how they can benefit from it. But educating employees about the benefits can encourage them to increase their contributions. Businesses can also work with financial advisors to help explain to their employees about the retirement plans and the advantage of having a higher contribution. They should emphasize the importance of preparing for their future by increasing their contributions.
Offer a Generous Retirement Package
Even as many people found themselves retiring earlier than expected due to the pandemic, others could not afford to retire since they were unsure about their finances. Businesses that offer a generous retirement package will put these employees at ease since they know that their financial future is secure.
And knowing that they will receive a generous retirement package will motivate employees to become more productive before retiring. It also takes away the anxiety that employees feel when they do not have enough funds to become comfortable when they retire. Additionally, it will make the business an appealing option for potential employees in the future.
Preparing for retirement is not easy for many employees. Due to this, businesses should exert effort to help them secure their finances when their employees retire.