Did you know that more than half of Americans feel like they’re behind on saving for retirement? What’s more, only 65% of eligible workers participate in their company-offered 401(k) plan!
It’s crucial to start saving toward the end of your career, but it’s just as important to put money away now. There’s a clear disconnect and lack of education of what saving can do for an employee’s future. The younger an employee starts, the easier and more comfortable their retirement will be.
It’s the HR and finance department’s job to set employees up for success. That’s why at Payroll Office of America, we make retirement reporting a streamlined process to keep employees in the loop.
If you want to encourage more of your employees to start saving for retirement, follow these tips:
1) Pay your employees a generous wage
There are several factors to take into account for determining employee wages, including position, tenure, and performance. However, in order to make your employees feel comfortable in investing for retirement, you must pay them a liveable wage where there’s money left over for savings and regular monthly expenses. Also, keep in mind that each employee should receive a 1-2% raise every year to account for inflation. This could be lower or higher depending on the year.
2) Establish an employer 401(k) match
The average 401k match in America is 4.3% of an employee’s pay. When an employer is able to establish some type of match, employees are much more likely to take advantage. How you set your match is completely up to you and depends on your business model.
3) Invest in reporting software
When employees invest money into their retirement fund, they want to view where that money went even though they won’t be able to touch it for many years. At Payroll Office of America, we offer extensive reporting that allows employees to view and easily manage their contributions with just a tap of a finger.
4) Increase employee retention
Putting your employees first and focusing on retention goes a long way. When an employee feels safe and secure at the company and in their personal finances, they’re more likely to set money aside for retirement purposes. What’s more, it costs less to retain and nurture the same employees versus dealing with high turnover rates.
We hope this article was helpful. At Payroll Office of America, we’re dedicated to creating a smarter, healthier, and more productive workforce through HR software. Learn more by visiting our website.