The percentage of employees with a retirement plan from their employer has been dropping sharply according to the Employee Benefit Research Institute (EBRI). An article in the Harvard Business Review on “Managing People,” stated forty percent of employees are planning to look for a better job within the next six months. About seventy percent say they are already looking around for better benefits. The retention of top notch talent is getting more and more difficult in the current economic climate because the demand for quality employees greatly exceeds the supply available.
There is a solution to the apparent paradox of employers cutting back on offering employee benefit packages in the face of an ever growing number of employees who are looking to jump ship for a better offer. The answer lies in the fact that there has been a massive paradigm shift in the benefits arena over the last several years.
Employers have moved away from a strictly paternalistic model that focuses on “looking after your employees” to an approach where the purpose of offering benefits is to assist the business improve its financial performance.
The theory is that increased financial health is in the best interest of everyone in the company. This mission aligns your employees’ performance with your company’s overall long-term goals. It serves as an incentive for your employees to stay with your organization as it continues to grow.
The debate is centered around two different management assumptions. One assumption is that employee benefit reductions increase profitability. The other assumption is that the employee and employer relationship is to be cultivated and nurtured. No matter what side of the debate you find yourself, the key is that all employee benefit plans must be fair and equally available to all employees according to the American Institute of Certified Public Accountants (AICPA) “Employee Benefit Plans Industry Developments – Audit Risk Alert.”
Pacific Crest Group (PCG) is a huge advocate for fair and equal treatment of employees as evidenced by its case study titled “Standardized Leave Policy Eliminates Favoritism and Lawsuits.” It is important that your employee benefit program establishes a positive culture that builds strong relationships with your employees. It must encourage your employees to make a long-term commitment to the profitability of your business for all.
PCG firmly believes that companies should be careful to hire people who are the most qualified for the job. Once you have them, you want to keep them for as long as possible. Employee benefits must focus on your employees’ emotional needs not just their financial requirements in order for them to stay with your firm over the long haul. It is imperative that you give them plenty of reasons to remain loyal to your organization.
Pacific Crest Group (PCG) provides professional services that keep your business focused on your critical objectives. We create custom made financial and Human Resource (HR) systems based on creative strategies that are always delivered with exemplary customer service. A PCG professional is happy to meet with you to discuss solutions for your unique requirements designed specifically to maximize all of your business opportunities.