I was only 21 years old when I started my career. To me, retirement was not even on my radar given that it was over 40 years out. It wasn’t until one of my coworkers talked to me about the importance of starting a retirement fund early that I actually gave it some serious thought. As insignificant as it may seem, that conversation is one I think of often. I’m grateful that someone cared enough to help me prepare for my future and ensure that I will someday be able to retire. If you’re not talking to your employees about the importance of having a retirement savings account in place, you may be losing out on an important piece of employee retention and engagement.
I should say that my coworker wasn’t the first person to talk to me about my retirement savings, or lack thereof. Every time our retirement plan service company would come in to give their presentation to new hires, I would get a reminder email stating the details about when and where the presentation was taking place, but would never go. The thing is, I didn’t really understand the importance of starting a 401k and what that would look like for me come retirement. Because of that, I didn’t pay much mind to the emails or announcements of our retirement plan provider’s arrival. It really wasn’t until my coworker took the time to sit down with me and explain the benefits of starting my retirement savings so early on in my career that I understood what this could mean for me.
While you might think you have good communication when it comes to your benefits, you might be missing your employees who don’t have a good base understanding of what these offers truly are. I would strongly recommend you have an ‘assigned’ person for each department to help walk your new hire through the benefits process. While the HR department normally assumes most of these responsibilities, you might find more participation when you have a fellow colleague approach your employees. Look at it this way, if you were relatively new to a company and HR told you about your retirement plans options while also giving you mounds of paperwork and other information, would the retirement plan information really stick out to you?
Starting a new job can be overwhelming, so it is likely that your employees will do the necessary paperwork and be done. Once they begin to get a little more settled into their role, they should be approached by a colleague to discuss benefits. I found my experience particularly helpful because I was connecting with a fellow colleague who I had already established a professional relationship with, so I felt comfortable asking questions on areas that were a little hazy to me. For me this allowed me to ask the ‘silly’ questions in an environment that I already felt safe in. If I were to have a one-on-one with the HR staff about the same topic, I probably would have not asked all the questions I did simply because I didn’t have an established rapport with them. It’s all about comfortability.
I can’t express how much gratitude I have that someone took the extra time to educate me on my situation and the options available to me. Honestly, though, it goes beyond the fact that I was able to put myself in a better place financially; it is the comfort of knowing right then that I was working for a company that cared about me and my future. Companies today are always preaching about their company culture and we are starting to see how much the culture aspect plays into retention. To me, this act of kindness spoke volumes about the company culture and how people at Dominion look out for one another. It was not in my colleague’s job description to educate me on the importance of a retirement plan, yet he took the time out of his day to talk to me anyway.
Your company’s situation will be different depending on the general age of your workforce. If you find yourself in a sea of Millennials, this idea of having a peer to connect with and call on is great. If your company is primarily Baby Boomers, then you’re probably okay with having your HR department handle these conversations. I say this because the younger your workforce, the higher likelihood they are to be less educated on things such retirement plans and the benefits of being enrolled. When you’re first entering the workforce, the amount of new information thrown at you can be daunting. I’m still a little confused on how many exemptions I need to claim on my taxes and I’m also not sure how I manage to pay into the city every year, so take these things into consideration when hiring. Just because you understand how things work does not mean others do. I was lucky enough to have someone reach out to me and assist, but your employees might not have that same luck. Make sure they know from the beginning that your company cares about them and their future financial security.