As your business grows and you add staff, choosing benefits and retirement plans becomes more complicated. You have many options to choose from. That variety, however, gives you a better chance of picking a plan that can more precisely meet your needs - such as rewarding key employees, beefing up their savings, and providing incentives for them to stay with your company.
At the same time, as competition and other forces strain company profits, business owners are looking for ways to gain more value from their executive benefit dollars. The dilemma faced by small business owners is how to control benefit costs, while providing enough sweeteners to keep their top workers happy.
Understanding what is important to them will help you assess the type of plan that will interest them most. At the same time, these employee discussions are a good opportunity for you to express your desire to keep these workers satisfied, what they can expect in terms of a retirement package, and what is expected of them in return.
Traditional qualified retirement plans, such as profit sharing plans and 401(k) plans have long been used to compensate and motivate employees.
In recent years, qualified plans have become less attractive to employers for two reasons: burdensome regulations have driven up compliance costs and Congress has limited their benefits. To combat these problems with qualified plans, some companies are supplementing or replacing traditional pensions with so-called "nonqualified plans" to attract and retain highly compensated employees.
These plans provide business owners with the flexibility to selectively reward and retain key employees, while allowing employees to replace benefits lost by government-imposed limits on qualified pension plans.
Attracting and holding on to top employees today calls for creative solutions. There are many ways to help provide the long-term security and other financial incentives these employees want.