Small Businesses – Unable to Provide Expensive Benefits – Cultivating Employee Loyalty in Novel Ways
The slow recovery from the Great Recession of 2008 and 2009 has most small businesses scrambling to cut costs and increase revenue. Employee benefits are very expensive. For instance if a 401k plan is offered the admin, associated fees, Employee Retirement Income Security Act (ERISA) compliance, continuing education, and statutory testing devour a disproportionate amount of time and dollars. Matching contributions compound the expense. Many small businesses simply cannot afford to offer these benefits.
For many employees, over spending and no easy way to budget and track expenses has led to overwhelming consumer debt. This staggering debt has caused tremendous challenges for the average worker in preparing for retirement. The average American family owes $120k including $10k+ on credit cards. With personal finances stretched beyond the limit some pay just the monthly minimum toward credit card debt, delaying payoff until the twelfth of never. $5k in credit card debt at 18% APR takes forty years to pay out completely if just minimum monthly payments are made.
Half of your employees will experience at least one tax or legal issue this year, causing 57 hours absent from work, and costing them anywhere from $200 for a traffic ticket, $1k for identity theft, $3k for audit representation or collection defense, to up to $20k for a divorce. This can wipe out their entire savings or cause even more debt. Over the past three decades the net return (after fees) on most retirement plans offered by employers has averaged less than 2.7% annually. 90% of employees are overwhelmed by financial issues compared to physical issues such as: only 20% exercise regularly, 20% are obese, 20% smoke, and 35% have high blood sugar. 45% are stressed and 60% are depressed as a result of financial overwhelm; stressed and depressed employees have higher absenteeism and are less productive at work.
Is there a solution? Indeed there is! Suppose you could offer your employees a complete financial wellness plan that costs you little or nothing, got them out of debt in 1/2 the time, gave ID theft protection, tax returns & advice, legal services, and includes a voluntary companion retirement plan offering stock market like gains without stock market risk, and ZERO matching, zero minimums, zero fees, zero admin, zero ERISA compliance, zero continuing ed and zero statutory testing? You would have healthier, wealthier, happier and more loyal and productive workers. And that’s a win-win.