What Your Employees Need From Their 401(k)
Sponsored Though many organizations offer wellness programs focused on health, it is imperative that, to retain talent and ensure productivity, employers must also be attentive to employee financial wellness.
When an employee is weighed down by financial stressors — spiraling into trepidation of effectively paying their bills or the possibility of saving for retirement — there is a profound effect on workplace productivity and engagement. In some cases, this manifests as a greater willingness to change jobs in the pursuit of stronger financial security — this may be especially true for workers who are approaching their retirement years. To safeguard against this potential talent drain, employer financial wellness offerings should include a 401(k) solution and retirement planning.
Productivity and financial stress
When employees are financially stressed, they are spending upwards of 13 hours a week dealing with monetary issues, majorly cutting into productivity.
According to Tom Conlon, head of client relationship management at Betterment for Business: “When employees have a healthy retirement nest egg, they aren’t going to waste a lot of productivity time dealing with these financial stresses.”
“Far too often employers hire service providers whose job is to sell the employee financial products,” said Conlon. However, that tactic fails to provide employees with personalized investing advice that is right for the individual, not the group. It is up to the employer to select a solution that empowers employees to reach better retirement outcomes.
“Employees don’t want a ‘lunch-and-learn’ session about their 401(k)s,” said Conlon. “What they want is on-demand, personalized advice.”
Supporting the employee
Employees don’t want a ‘lunch-and-learn’ session about their 401(k)s.
The switch from pension plans to 401(k)s put the onus of properly saving and investing for retirement on the employee. Employers need to go beyond the outdated idea of “onsite education and lots of fund choices” in order to avoid a one-size-fits-all system. Instead, employers need to focus on providing workers with proactive measures that help employees save more and invest smarter — for example, personalized advice on how to maximize retirement money. The goal is to provide each employee with a tailored plan that fits their needs.
“You want to put people in charge of their 401(k),” said Conlon, but to achieve true financial wellness, you also need to give them the right solution for stress-free retirement planning.