January 21st, 2020
I'll put the point upfront: culture matters. It matters because it dictates the talent you attract and the results your company drives. Bad culture drives increased turnover and longer time to recruit talented employees. Today, millennials look at cultural fit as a #1 reason to choose a place of employment and will increasingly choose flexibility as the reason to select an employer (according to this SRHM article).
Culture is such a vague concept though. What does culture mean? I turned around and asked a few people sitting next to me. One response, “it’s a place I feel comfortable bringing my ideas.” Another responded and said, “it’s a place I find meaningful work and my employer cares about me as a person, not a revenue number.”
What does it mean to care about your employees as individuals? It means understanding what motivates them and what their personal struggles are. Employees are individuals with different struggles, yet we provide one-size fits all methods to compensate and reward employees.
Reward is about pay and other “perks”. It may be that gift card over the holiday or that team lunch.Besides healthcare, the largest cost program for companies that provide a 401k/403b match or profit sharing. However, the retirement program may not actually serve the largest financial concerns employees have. Afterall, retirement is in 30 years! Plus, as employees begin to demand flexibility, why not give flexibility and choice in your benefits?
Your retirement program can offer flexibility and allow employees to choose how to allocate the company contributions. Dollars they don’t put towards retirement can be allocated to student loans, the largest financial concern for young employees. It’s a matter of what they need, so let them choose.
Over 30% of employers will directly provide student loan repayment assistance over the next 3 years because it engenders loyalty and keeps employees with debt more productive. Sure it might cost your company more when people increase their match participation, but the cost of not giving choice will cost your company more in turnover. Learn about attrition is actually costing your company today at https://www.myloansense.com/savings
Rethink the 401k.