Many workers who have great concerns about their financial future are living from paycheck to paycheck as the country’s worst recession continues. According to a report from the Employee Benefit Research Institute, almost half of all Americans will not have enough money saved for their retirement years.
In his latest N & O column, “The View from HR,” CAI’s CEO Bruce Clarke dispenses helpful information regarding retirement savings to managers and their employees. Bruce says there are several reasons why people elect to not save: being young, weary about the stock market, laziness, general confusion and thinking their salary rate is too low.
In a recent study, ING found that 44 percent of its survey respondents said they probably would not be saving for their retirement if they did not have a plan from work. Fifty-two percent of those participants said that their employers, above family and friends, have the most influence in getting them to start saving for retirement.
As an employer, knowing that employees place importance on company retirement plans should prompt you to help them utilize tools and information that are at their disposal for planning a successful retirement. Try the strategies below to help them invest in their future:
Communicate and Educate
Many workers believe that their organizations are one of the only credible sources for retirement information. Communicate to your staff why saving for the future now is the best way to be financially stable in retirement. Constantly remind workers of the different saving options and tools your company provides. Make sure they understand each option, and help them choose the best one for their situation.
Because budgets continue to get cut, organizations are looking to reduce funding in certain business areas, and benefit allocations tend to go on the chopping block. Instead of drastically reducing the cost of each employee benefit, such as retirement and paid-time off, ask employees how they would prefer their benefits to be distributed. Offer workers several options, and have them vote to choose the best option for the overall organization.
Keep It Up
Continue to offer your employees the best savings and retirement plans your organization can provide. If your company elected to match employee savings in their 401(K)s, do not stop because budgets are smaller. If your company is really unable to maintain the company match, ask employees to increase the amount of money they are saving to make up the difference. Consistently communicate the importance of saving.
“The lack of financial literacy is a bigger cause of our failure to prepare for the future than the actual inability to take small steps,” Bruce says in his column.
Educate your employees on the importance of saving for their retirement, and keep them informed on any changes to your workplace benefits.
Photo Source: Keoni Cabral