IMGCAP(1)]Retirement plans are often considered strategic advantages for businesses, yet many small businesses do not offer their employees 401(k) plans. As an accountant, this is another discussion you can have with your business clients, to help them understand the value of retirement plans and how they can build upon the success of their company.
There are a number of reasons why your clients may choose not to offer this benefit to their employees. Some of these misconceptions include:
• Plans are an expense small businesses cannot afford.
• Organizing and tracking retirement plans is too complex and time-consuming.
• Offering a 401(k) plan can increase other costs, such as health care.
However, retirement plans are one of the lowest-cost and highest-value benefits an employer can offer.
Discussing retirement plan options with your business clients will not only educate them on the advantages, but will allow you to play a crucial role in your clients’ success. This is because there is one key benefit many business owners overlook when contemplating adding plans: the impact on employee productivity and satisfaction.
Your clients should consider a retirement plan as an attractive retention tool. Although many small businesses feel they are not profitable enough to offer a 401(k) plan, in reality their profitability is hindered when employees do not feel valued or “enfranchised” by company owners. The quality of employees can make or break a small business and satisfied employees are good for your clients’ bottom line—and in turn, how your clients do business with you.
Benefits are a major differentiator for candidates in the job market today and help companies attract the top performers needed to close their talent gaps. Prospective candidates pay significant attention to compensation. However, compensation does not stop with salary and bonus potential. Benefits are a core part of a company’s total compensation offer, and 401(k) plans can help your clients out-compete for talented employees, particularly among smaller companies.
These plans also provide a distinct advantage when it comes to achieving business and personal goals. Employers who help employees prepare for retirement can also increase that employee’s competitiveness. This is because an attractive benefit, such as a 401(k) plan, demonstrates the value the employer places on the employee and can therefore increase employee loyalty and productivity.
This also increases employee satisfaction, which can help your clients secure a competitive advantage—an important element for small businesses competing against larger corporations. When you combine all of these benefits, a thriving company culture is inevitable. This significantly impacts brand perception and plays a key role in attracting and retaining high caliber employees.
Retirement readiness is a growing concern for today’s workforce, with greater responsibility placed on the individual to plan accordingly. Business owners will not only strengthen employee relationships by offering 401(k) plans, but safeguard their company’s potential.
Having successful business clients is equally important for accountants. As your clients continue to grow, so do the opportunities for you to serve their business. Many accountants find that discussions around employer-sponsored retirement benefits also provide a natural extension to valuable conversations around the business owner’s financial plan, offering yet another opportunity to enhance your role as trusted advisor. With recent uncertainties surrounding Social Security and Medicare, having a strategy in place is necessary for the future. If your business clients don’t currently offer a retirement plan, it’s worth discussing their options with them.
Paul Davidson is director of product management at
