Attract Top Talent to Your Small Business with a 401(k) Plan
If you’re a small business owner, you know that attracting and retaining top talent is critical to your company’s success. But getting potential employees to choose your business can be tricky. That’s where 401(k) retirement plans come in. 401(k)s can attract top talent to your small business by making your benefits package competitive with that of a much larger business.
Will offering a 401(k) set my small business apart?
The short answer? Yes. (The long answer: Absolutely yes.)
According to Gusto1, only 15% of businesses with fewer than 10 employees offer retirement plans. This is a stark contrast to companies with over 100 employees, where that figure rises to 65%. By offering a 401(k) plan, your small business will be able to attract talent away from much larger companies, especially if you’re able to offer an employer match.
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A 401(k) can attract top talent…
Offering competitive benefits is important for small businesses. Not only does it help you stand out from other businesses in your industry, but it also allows you to pull from a wider range of candidates – ones that might be coming from corporations with more resources at their disposal. (Take that, break room granola bars and in-office ping-pong tables.)
If an applicant is looking at two similar companies but one offers an employee benefit such as a 401(k) or health insurance while another does not – and both offer competitive salaries – which company do you think they’ll choose?
This same logic applies when comparing two job postings; if one mentions that there is an employer match on contributions made into its 401(k), then it will stand out as being more attractive than its competitor.
…And help retain them.
Retaining top talent is a challenge for small businesses. By offering 401(k) plans, you can help your company keep the employees that make it run. With fewer resources and more demands on everyone’s time, reducing employee turnover is critical to your small business’s success.
Not only does a 401(k) plan help with recruiting, it also makes it easier for employees to stay with you when they’re considering opportunities elsewhere because they could lose unvested funds from your employer match and other benefits. Retirement benefits also help keep your employees content by showing that you care about them and support their financial goals.
401(k)s create a culture of investing in your company.
Employees who participate in their retirement accounts are more financially invested in their careers, and that’s good news for your small business. They’ll be less likely to leave for another job opportunity or to start their own company (which could compete directly with yours).
401(k) plans benefit small business owners (and their employees).
Onboarding new hires can be costly, so doing everything you can to ensure top-performing employees stay at your small business is more cost-effective.
By implementing a 401(k), you get to help your employees save for retirement and save on taxes – if you offer a match, your contributions are tax-deductible. An employer-sponsored 401(k) plan also helps your benefits package stay competitive with larger companies. Plus, it’ll make your employees feel valued and more likely to stay at your small business.
Ubiquity is not a registered investment advisor and no portion of the material herein should be construed as legal or tax advice. Please consult with your financial planner, attorney and/or tax advisor for advice.