If you think it’s tough to review your personal 401(K) statement when so many are looking at 20-30% losses to their accounts, imagine the corporate accounts and the devastation that they are experiencing on a much larger scale. Then factor in the impact of that experience on small businesses who are struggling to survive in the wake of the Covid19 economic situation. We need to solve for how businesses protect their assets, keep their operations viable, as well as the most important issue: attracting and retaining key talent. The important thing to keep in mind is managing the short-term demands while maintaining a keen focus on long-term perspectives. Employers will not be given a “pass” by employees and candidates on poor and short-sighted behaviors during these times. There are incredible examples of small business leaders doing exceptional things to help their employees through these tough times that does not require a large financial investment. Flexible hours for those employees already working remote has helped to reduce the stress on parents tasked to guide their school-age children through studies during the day and staggering their work shift to before and after the school day reduces the strain during the peak daytime hours for these individuals. So many employees can work flexible schedules and many find that they are even more productive in these emerging work arrangements. I’m curious to see how many of these situations remain intact long after the critical need for them expires.
While we can all recognize that many small companies are forced to limit their spend and reduce or remove the traditional benefits like 401(K) match and company-wide bonuses, there are other options to fill the void. In speaking with industry experts on proactive alternative solutions to benefits programs, I received some encouraging suggestions. Consider non-qualified bonus programs for critical employees and key contributors as a means to retain key talent. These programs do not require the aggressive hurdles that qualified plans do and offer some creative options for all parties. Term insurance rates are at an all-time low. Employers can research an option to extend life insurance coverage to key employees to limit the financial worry for their family members should they succumb to a serious illness or accident. There are insurance companies currently waiving physicals for individuals requesting less than $1M in life insurance and for those under 60 years old, there is a $2M limit. There are also progressive options available for disability and business protection plans to proactively investigate.
These options open up good benefit alternatives for employees to consider that allows them to carve out a legacy for loved ones should they find themselves in a disabling or life-threatening situation. We cannot control the health of our employees, nor can we touch the heartache that surrounds these situations but we can work to mitigate unnecessary financial worry for family members should they become unable to provide for them in the future. While some say that life and disability insurance is just too depressing to discuss, I say that it’s horribly short-sighted and depressing to not discuss it while everyone is healthy and able to make informed and planful decisions. These programs can also be extended to employees without the company bearing the entire expense. The company can manage the minimal administrative costs (or pass them on to employees) and leave the program as a supplemental offering to select or all employees. Even though you may need to trim or reallocate costs, you can still provide a competitive benefit program to your teams. If you are a progressive leader and interested in hearing more, I can help you make a positive difference for your team members.
HR MD 