Higher retention rates

According to a study from MetLife, around 40% of employees name retirement benefits as a primary reason to stay with their current employer. When nearly half your workforce wants help with retirement savings, you can’t afford to ignore the need.

Give your employees the 401(k) options they deserve, and they’ll reward you with longer tenures. Better employee retention leads to all sorts of positive outcomes, including not having to spend time and money hiring and training new people, so don’t miss an easy opportunity to keep your team together, happy and productive. which could be the difference between landing a top candidate and losing that candidate to another employer. If you’re on the fence, remember that the money you spend on 401(k) contributions will be less than the money you’d spend trying to fill an open position.

Financial security

Many people, even people with good paychecks, struggle to save money. By offering a 401(k), you can take some of the burden off your employees by automating the savings process. They won’t miss money they don’t see, and as their savings accounts grow, they’ll feel more comfortable about their future.

In times of hardship, employees can even borrow against their 401(k) balance, providing an extra lifeline for emergencies.

Once in place, your 401(k) plan will continue to pay dividends in both recruitment and retention. But not all 401(k) plans are created equal. It’s not enough to offer any old 401(k) with any old 401(k) provider — you have to vet potential deals and partnerships to find the right fit.

Today’s workers, especially young ones, have grown wise to fees in financial products. Millennials are far less likely to stick with a fee-happy bank than their Baby Boomer parents, and the same mindset applies when it comes to 401(k) plans. Young workers want low fees, even if they have to hunt them down themselves.

Small businesses can offer 401(k) plans with low fees by vetting potential providers carefully. Some unscrupulous salespeople will try to push higher-fee plans on business owners who don’t know any better. Check out multiple providers, and ask to see the different investment options they offer. If all their funds start with fees above 1%, run the other direction.

Employees also want easy access to their money, even if penalties prevent them from withdrawing it directly. Find a 401(k) plan provider with a clean user interface and helpful customer service. When people can’t log in to view their investments and performance, they get nervous about what might be happening behind the scenes.

With the provider set, the best thing you can do as the employer is offer a contribution match. Doing so may hurt your bottom line initially, but with some companies offering no-match 401(k) plans, you’ll stand out through your commitment to your workers’ futures.

With higher retention rates and a larger pool of eager candidates, you'll more than make up for your short-term expenses in long-term gains.

Put beer kegs, beanbag chairs and pinball machines in the break room if you want, but don’t neglect the benefits that keep employees feeling secure. Your health insurance, PTO and 401(k) plans make up the foundation of your benefits package in employees’ eyes.

Skimp on those, and you may have trouble persuading your biggest stars to stay.

Rhett Power is the CEO of Power Coaching and Consulting and the author of “The Entrepreneur’s Book of Actions.”

ROSS AND HELEN/DREAMSTIME