This employee benefit & hiring incentive may help your office compete.
May 3, 2017
Great employees are hard to find. This truth applies for all businesses, including healthcare practices and facilities. The challenge just begins at the point of hiring. Finding top-notch workers is one thing; retaining them is another.
If your practice offers no 401(k)/Profit Sharing Plan, this amounts to a recruiting disadvantage. Fewer potential employees may want to work for a company that offers no retirement savings plan. That may also encourage turnover, which could add to your office’s financial headaches.
Just how much do employees value benefits like 401(k)/Profit Sharing Plans? In its 2016 annual survey of U.S. workers, the Transamerica Center for Retirement Studies discovered that 89% thought a 401(k) or similar retirement plan was an important benefit. Sixty percent of workers called it “very important.” Just how many U.S. businesses with less than 100 workers offer retirement plans? Seventy-two percent.1
In a recent Towers Watson employee survey, more than half of the respondents cited healthcare and retirement benefits as an important reason to remain at a job. Research from iCIMS Hire Expectations Institute, a project of talent acquisition software maker iCIMS, finds that 66% of employed people keep an eye out for new job possibilities with better pay and benefits packages.2
A 401(k)/Profit Sharing Plan need not “break the bank.” In fact, your healthcare practice can even get a tax break to help counteract some of the setup expenses. Businesses with less than 100 employees can claim a $500 federal tax credit for the first three years of originating their 401(k)/Profit Sharing Plans ($1,500 total over three years). Today, there are low-cost 401(k)/Profit Sharing Plans to suit many styles of businesses, from start-ups to emerging to established.3
Matching contributions are nice, but not mandatory. Some healthcare practices with 401(k)s offer a partial match; some do not. If you do match, you provide more incentive for your employees to participate in the plan and stick around, and you may also qualify for a tax break. Businesses that match employee 401(k) contributions can apply for federal tax deductions for the expenses incurred in making the match.3
You can set up the plan with the help of an experienced financial professional. UPAL can collect appropriate data and perform non-discrimination testing to start. Next, financial professionals at UPAL can design the details of the plan. Should you match employee contributions to some degree? What about profit-sharing contributions? What investment options should the plan offer? Should it have a Roth 401(k) option? Should loans be permitted? Finally, there is the matter of who keeps the records of the plan.
With effective employee education provided by UPAL professionals acting as fiduciaries, your workers can understand the full value of what you are offering and participate in the plan actively and consistently. Education can also dispel some of the myths about these retirement programs.
Some healthcare industry workers see small healthcare offices as stepping stones. They are simply places to gain experience en route to a “better” job at a healthcare corporation with a great benefits package. Offering a 401(k)/Profit Sharing Plan can help to alter that transitory mindset and give you more of a chance to retain those individuals.
A 401(k)/Profit Sharing Plan is a vital tool to recruit & retain good employees. Talk to UPAL about creating and implementing a 401(k)/Profit Sharing Plan today.
Already have a 401(k) in your practice? If you’d like to take a closer look at your options as a 401(k)/Profit Sharing Plan sponsor, contact UPAL today for more information or a no-cost, no-obligation plan review.
UPAL has been designing retirement plans for healthcare providers for 3 decades. Let us share our specialized knowledge and 30 years of experience by helping you evaluate your current retirement plan. In understanding your practice’s goals, objectives and workforce, we can design a 401(k)/Profit Sharing Plan that meets the unique requirements you face as a healthcare provider.
UPAL may be reached at 918-747-5585.
Citations.
1 – transamericacenter.org/docs/default-source/employer-research/tcrs2016_sr_the_current_state_of_401ks_the_employer_perspective.pdf [6/16]
2 – icims.com/hiring-insights/for-employers/article-the-correlation-between-benefits-and-employee-retention [12/22/15]
3 – forbes.com/sites/winniesun/2016/04/26/what-youll-want-to-know-before-setting-up-your-first-company-401k [4/26/16]
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