Employee Retention Advantageous for Smaller Companies

 

Employee Retention Advantageous for Smaller Companies

It is advantageous for smaller companies to make employee retention a top priority.  There are many benefits to maintaining a high employee retention rate.  Not only does it promote higher levels of engagement and productivity on the job, it also helps to reinforce a positive work culture –which ultimately increases revenue.  All of these reasons and more are why companies should work on their strategy for how to keep their turnover rate as low as possible.  One of the ways in which companies can achieve this is by working to improve the employee experience by elevating their retirement package.

Upon the conclusion of The Plan Sponsor University (TPSU) Fiduciary Education Program held at The University of Georgia, Founder and CEO Fred Barstein spoke with Plan Sponsor Ms. Angella Graham.  Angella, who is a Senior Fiduciary at a non-profit of about 93 employees, expressed her organizations’ efforts to attract top talent/employees by increasing their 403(b) match from 5% to 8%. “We did this as an attraction, because a lot of the people that we hire, they are from big university who have great 403(b) and 401(k) plan. So, in order to attract top talent, we decided to move our 403(b) match from 5% to 7%, and then from 7% to 8% as a way to retain it.”

The effect has been great for their organization, according to Angella, with a result of 95% employee participation and very minimal turnover rate.  It’s an example that many small employers may want to follow, as increasing employee matching allows for employees to maximize their retirement savings, while employers get the benefits that come with investing in their staff’s futures.

Read the Full Transcript Here

Fred Barstein:

Greetings. This is Fred Barstein, founder and CEO of TPSU, The Plan Sponsor University at the University of Georgia, Terry School of Business, their Atlanta campus in Buckhead. And I am here with Angella. Welcome, Angella.

Angella:

Thank you.

Fred Barstein:

Okay if we ask you a few questions?

Angella:

Yes.

Fred Barstein:

Okay. Before we do, tell our audience a little bit about yourself and the size of your organization.

Angella:

My name is Angella, and I work for a company that is about 88 people in the United States and five in Canada.

Fred Barstein:

What’s your role?

Angella:

My role is Senior Director of Human Resources. I manage everything human resources, and I’m the fiduciary for our 403(b) plan.

Fred Barstein:

Senior fiduciary-

Angella:

Yes.

Fred Barstein:

… that’s what we’re going to call you. Okay. So in the program, you talked about your match and how you increased it. And what did you do?

Angella:

So basically, we are a nonprofit that supports libraries and archives. So we did this as an attraction, because a lot of the people that we hire, they are from big university who have great 403(b) and 401(k) plan. So in order to attract top talent, we decided to move our 403(b) match from 5% to 7%, and then from 7% to 8% as a way to retain it. Our vesting is after six months.

And what we do is we allow employees, if you contribute 5% of your income, we will contribute 8% of your income. Therefore, if you’re offered a job of $80,000 a year, we will contribute another 4,800. And the thing is, as long as you contribute that 5%… It doesn’t matter when, you could do it at the beginning of the year, in the middle. As long as you’re employed, you will get the match. You will get the 4,800.

Fred Barstein:

So when did you do that? Recently?

Angella:

So we did that two years ago, just increased it. So several years ago, 2016, we moved from 5% to 7%. And then two years ago, we moved from 7% to 8% match.

Fred Barstein:

And have you seen an effect?

Angella:

We are at a, I would say about 95% participation rate. Most employees participate as of day one.

Fred Barstein:

And you’re keeping people? Not a lot of turnover?

Angella:

Minimal turnover. Turnover is just regular turnover, people finding other jobs somewhere.

Fred Barstein:

They might even retire.

Angella:

And they might even retire.

Fred Barstein:

Final question for you. How was the program and what did you get out of it today?

Angella:

Oh, I liked the program today. One of the key things I get out of it today was taking my fiduciary responsibility very seriously. And the fact that I can outsource more in terms of some of the things that I am also right now administratively doing. So I think those were key areas that I needed to look into, and to see how I can be a better fiduciary. So I like that.

Fred Barstein:

Very good. Well, thank you for your time today.

Angella:

Thank you.

Fred Barstein:

And thank you for watching 401kTV-

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