Do job candidates want to buy what you're selling?
"Let's put it this way: if employment is a product, then what would the candidate want to buy?" said Juan Pablo Gonzalez, who works with companies to design compensation packages, among many other things, at Axiom Consulting Partners. He may have implied at a dinner party that a match or a retirement plan may not be the best investment for an employer's dollar...and I may have been mildly offended at first!
But let's explore his valuable point further, shall we?
When looking at your retirement plan, it's important to design it with your business, your job market competitiveness, your culture, and your budget in mind. These are the key points we use when facilitating the conversation around "What's your plan supposed to do?" with any new client of ours. Without that answer, we can't find the right mix of specs and vendors for the plan to ever reach anything that seems successful.
Recently I on-boarded a new client ("Client A" for our story) who was a spin-off of a larger corporation. What they do is highly specialized and requires very specific, hard-to-aquire talent. Needless to say, these candidates look for a beefy package when shopping for a job. Our conversations about how to construct their plan was based on having a benefits package that these types of candidates would be interested in and would find valuable, with an emphasis on Keeping Up With the Joneses. For this client, their plan and employer contribution is an integral part of getting the right people in the door and keeping them from looking elsewhere.
Contrast this with another long-time client of ours ("Client B") who has a less specialized workforce, and struggles at times with getting turnover below industry average. Their workforce values having a retirement plan, but they value other things more. For their recruiting and retention efforts, the retirement plan is further down the list for what these particular candidates are "buying" when they come to work for them and thus they don't spend nearly as much as Client A on their plan...and they shouldn't.
This is all, of course, in contrast to our great wish to build the most generous, awesome, spins-like-a-top and makes julienne fries Retirement Plan for every company, but hey, we're a small business. We get it. It's a balancing act on where you put your dollars to get what you need from your workforce.
"It's a value exchange. You're exchanging money and other benefits for someone to show up and give you work product and results. Meanwhile, your employees are someone else's candidates; they are being wooed. You have to find out and promote what it is that your employee body wants to hear and wants to have."
She's often asking clients whether they know if they are over- or under-investing in something. Way points out that we have a tendency to put something in place and then leave it in place... and not talk about it after. It's not hard to end up down the road with "Well, it's always been that way..." Then, the other variable is about how you advertise and educate your people on it (a topic near and dear to my heart conducting employee meetings). If no one knows you have this program, or if it's any good or how it's better, or they've all forgotten, is it helping you?
The problem with retirement plans is that they're not sexy despite all the care and consideration and cool stuff that happens with them behind the scenes. Employee communication on the plan is often something that falls to the bottom of the already overworked HR person's list, or gets lumped in with once-a-year open enrollment meetings. We frequently act as the "out of town expert" that touts the value of the plan and gives employees perspective on their whole benefit package when conducting employee meetings. Without that framework though, the retirement plan easily becomes just another benefit...yadda yadda...and ceases to be special. In short, it takes work to continue to make it meaningful, a future task we'll be working hard at for Client A above.
So let me ask you - if employment at your company is the product, what do your candidates and current employees want to buy? How does your retirement plan fit in?