Are you wondering if it’s time to start offering benefits to your employees? When small businesses grow, they can offer different types of compensation in addition to salary. There are many options for benefits, including pension plans.
These plans provide a monthly payment to your employees after they retire, and they help employees fund their retirements. But why would businesses offer these plans? Here are five reasons to offer your employees a pension plan.
1. Attract Good Employees
Your employees are key to your business’s success. If you hire talented, hard-working employees, they’ll help you grow your business. If you hire the opposite, your business could suffer. It can be difficult for small business owners to attract the top talent they need to take their companies to new levels.
With a pension plan, it will be easier for you to attract good employees. Talented employees don’t just take jobs based on salary; they can be picky and choose the jobs that offer the best benefits packages. A pension plan can help you lure good employees to your company and away from your competitors.
2. Increase Employee Loyalty
A retirement plan can also help you hang on to the good employees you already have. When employees don’t have benefits at work, they often start looking for other opportunities that will provide more compensation. Without a retirement plan, you may end up losing your best employees to other companies that offer plans.
Once you start offering a retirement plan, your good employees have less reason to leave. They’ll know they’re valued. They’ll know they’re being well-compensated by your company. This can lead to higher morale among your employees, which equates to higher job satisfaction.
3. Increase Total Compensation
As a small business owner, you may not have the budget for large salaries. However, salary isn’t the only type of compensation employees value. Other types of compensation, like pension plans, are valuable parts of employees’ total compensation.
If you choose the right retirement plan with the help of compensation specialists, offering a plan is very affordable. There are low-cost retirement plans available, and by offering one, you can increase total compensation while also paying low management fees.
Once you start offering a retirement plan, show employees how valuable it is by creating total compensation statements. These statements give visibility to how much employees are actually being paid, beyond their salaries.
4. Gain a Competitive Advantage
Most small businesses don’t offer pension plans for their employees. In fact, only 19 percent of Canadian small businesses have retirement plans. If your business starts offering a retirement plan, you’ll set yourself apart from the many companies that aren’t.
When you offer a good benefits package that includes a pension plan, your company is more attractive to good employees, and good employees are more likely to stay with your company. You need the best employees to grow your business. Your employees are your competitive advantage.
5. Give Employees Retirement Security
Many people aren’t saving enough money to ensure a comfortable retirement, and the Canadian Pension Plan (CPP) doesn’t pay out very much. An employee who retires at 65 will receive just over $1,000 per month from the CPP, at most, and that’s not a lot to live on. Your employees may be worrying about how they’ll look after themselves when they eventually retire.
By offering a private retirement plan, you can give your employees more security during retirement. When employees don’t need to worry as much about their futures, they’ll be happier, and they’ll be able to focus on their jobs. Offering your employees some retirement security is a win-win for them and your company.