This employee benefit & hiring incentive may help your office compete.
Great employees are hard to find. This truth applies for all businesses, including healthcare offices. The challenge just begins at the point of hiring. Finding top-notch workers is one thing; retaining them is another.
If your healthcare office offers no 401(k) plan, this amounts to a recruiting disadvantage. Fewer potential employees may want to work for a company that offers no retirement savings plan. That may also encourage turnover, which could add to your office’s financial headaches.
Just how much do employees value benefits like 401(k)s? In its 2016 annual survey of U.S. workers, the Transamerica Center for Retirement Studies discovered that 89% thought a 401(k) or similar retirement plan was an important benefit. Sixty percent of workers called it “very important.” Just how many U.S. businesses with less than 100 workers offer retirement plans? Seventy-two percent.
In a recent Towers Watson employee survey, more than half of the respondents cited healthcare and retirement benefits as an important reason to remain at a job. Research from iCIMS Hire Expectations Institute, a project of talent acquisition software maker iCIMS, finds that 66% of employed people keep an eye out for new job possibilities with better pay and benefits packages.
A 401(k) need not “break the bank.” In fact, your healthcare office can even get a tax break to help counteract some of the setup expenses. Businesses with less than 100 employees can claim a $500 federal tax credit for the first three years of originating their 401(k) plans ($1,500 total over three years). Today, there are low-cost 401(k) plans to suit many styles of businesses, from start-ups to emerging to established.
Matching contributions are nice, but not mandatory. Some healthcare offices with 401(k)s offer a partial match; some do not. If you do match, you provide more incentive for your employees to participate in the plan and stick around, and you may also qualify for a tax break. Businesses that match employee 401(k) contributions can apply for federal tax deductions for the expenses incurred in making the match.
You can set up the plan with the help of a financial professional. He or she can collect appropriate data and perform non-discrimination testing to start. Next, that professional can work out the details of the plan. Should you match employee contributions to some degree? What investment options should the plan offer? Should it have a Roth option? Should loans be permitted? Finally, there is the matter of who keeps the records of the plan.
With effective employee education provided by plan advisors acting as fiduciaries, your workers can understand the full value of what you are offering and participate in the plan actively and consistently. Education can also dispel some of the myths about these retirement programs.
Some healthcare industry workers see small healthcare offices as stepping stones. They are simply places to gain experience en route to a “better” job at a healthcare corporation with a great benefits package. Offering a 401(k) plan can help to alter that transitory mindset and give you more of a chance to retain those individuals.
A 401(k) is a vital tool to recruit & retain good employees. Talk to a financial professional about creating and implementing a 401(k) today.