Employee Resource Groups (ERGs) are an important element of DEI. What are ERGs, and how can they work within your company?

At the end of each year, companies spend time fiscally planning their initiatives for the upcoming year. Just as other projects require budgeting, so do your intended Diversity, Equity, and Inclusion (DEI) efforts. You can only meet your DEI goals if you set aside dedicated funds. It is, therefore, essential to link DEI efforts directly to the budgeting process. As you plan your budget for 2023, include a portion for DEI after assessing your desired outcomes. Consider your company’s size, DEI efforts and initiatives, and overall goals when making decisions about what your allocation should be.

The month of October recognizes the importance of financial planning. October is both Economic Education month and National Financial Planning month. On first consideration, it may seem that these themes do not relate to our DEI efforts. However, when we view these themes from a different perspective, we can see that focusing on diversity helps to flush this topic out and provide a complete picture.

Without access to education on financial literacy, many people grow up to have an incomplete understanding of how to plan their future. As we’ll explore in this blog post, access to this education is often dependent on upbringing and race, which leaves non-white individuals at a disadvantage. As we recognize the importance of economic education and financial planning, let’s acknowledge racial disparities and what the HR and SMB communities can do to combat them.

There is a war for talent right now, and employers need to be competitive to get the best candidates. High salaries alone may not cut it, which means you need to get creative with the benefits you’re offering. Mental health, and how to support your employees, has been a popular topic of discussion in the business world. In a recent study, more than 40% of U.S. consumers reported that they had difficulty paying a bill. Those with lower incomes were much more likely to struggle with finances, but 18% of respondents with incomes over $100,000 also reported that they struggled with expenses. This demonstrates that all employees struggle with financial stress from time to time, no matter their income level.

So how can you support your employees with their finances if you’re already paying competitive salaries? You can offer benefits that strengthen their financial literacy. There are services like FinFit, that all PrestigePEO clients have the option of enrolling in at no extra cost, which makes finances simple. Up to 58% of FinFit’s clients report that they see an improvement in employee retention after offering this benefit. Below are just some of the top benefits of providing a financial wellness program to your employees.

Stressed workers aren’t efficient workers. Finances are a significant contributor to employee stress, and a Bank of America survey found that 51% of employees are more worried about their finances now than they were during the height of the pandemic. When you’re struggling with your finances, you may not be able to afford activities that can relieve stress, like a vacation, a massage, or even having a dinner out with friends. Our country has gone through a mental health crisis over the past couple of years and the companies that retain employees are the ones that are offering ways to support their team members. Happier workers feel more satisfied with their jobs, and workers that are supported by their company feel valued and are more likely to stay.

In the not-too-distant past, mental health issues were a taboo topic, especially in the workplace. Now we not only acknowledge that mental health is important and struggling with it is common, but we also have employers that want to care for their team members with resources and tools.  It is an amazing change for the better, and one that benefits both employees and employers.

According to a recent report, employees spend 25% of their workday worrying about money. When an employee is stressed about their finances, this doesn’t just affect their personal life. Often, this affects all aspects of their life, including their work. Therefore, financial stress impacts your bottom line and contributes significantly to employee burnout. A stressed employee may have strained relationships with their colleagues, is less productive, and produces lower quality work. Providing your employees with a financial literacy tool can ease these worries and improve productivity. When team members feel less stressed about finances, they can focus on their work and productivity increases. 88% of FinFit’s clients reported an increase in productivity after offering this benefit.

If an employee is anxious about their finances, they are more likely to have compounding health problems. Anxiety, depression, and insomnia can all occur because of severe stress. These are also contributing factors that affect productivity, and an employee suffering from these symptoms will likely have poor quality work. Further, stress can cause or worsen conditions like heart disease, gastric distress, high blood pressure, diabetes, and more. When you lower stress, you lower the chances of all these conditions, and you have a healthier and happier employee.

Many people who are in dire financial need don’t know where to start to rectify their situation. A tool like FinFit takes the confusion out of the equation. When the employee signs up, which all Prestige clients can do via the FinFit website, the FinFit app, and the PrestigeGO app, they will be presented with a variety of easy-to-read tools. They can get an overview of their finances, and FinFit will provide the employee with savings goals. Each month FinFit will let the employee know how they did with their budgeting goals and where they can improve. It can even guide the employee through tax planning and help the employee decide how much money to withhold. If they have any further questions, FinFit offers free financial coaching. By offering a financial wellness tool to your employees, you provide them with an amazing opportunity to understand and plan their financial future. You are also letting them know that you care about their wellbeing, and they are not just another employee.

To support your staff and attract talented candidates, it is important to offer well-rounded and comprehensive benefits. Think about the whole picture, not just the work your team delivers. If your employees have great benefits, retirement options, and are confident about their financial future, they will be well prepared to be productive and hard-working. Providing a financial wellness tool to your employees is a simple and cost-effective way to provide an amazing resource. If you are a current client and you would like to learn more about FinFit, please contact your Benefits Specialist. If you are interested in joining Prestige and want to hear about our financial wellness tool and our other Fortune 500 benefits, contact us at any time.

You can never really predict when someone may leave your company. They may find another opportunity elsewhere, they may decide to move out of the country or take an opportunity better suited for them. But when you have team members that are getting close to the retirement age, you may be wondering what their plans are. It can be difficult to get this conversation started – you do not want to offend anyone, or worse, say something that could be construed as age discrimination. Fortunately, by keeping lines of communication open, and by staying positive and honest, you can address this subject without issue.

Asking your employee when they plan to retire does not need to be a negative conversation. In fact, retirement is positive!

There are many reasons an employer would need to know an approximate time frame of when an employee is going to retire – namely, for succession planning purposes. If you have forewarning that your employee plans to retire in, say, 3 years, you can create a plan so that you’re not left in the lurch when they leave. Ideally, the employee will be agreeable to this and can help you strategize a way for them to pass down their knowledge, consider who internally may be able to take their place, or think about hiring and training a new candidate if necessary. Their input will be extremely useful in making sure that you don’t lose out on years of knowledge and experience when your employee retires.

You should also go into the discussion with an open mind. Retirement isn’t like it used to be, where the majority of workers stopped working immediately when they turned 65. Some people may want to reduce their hours rather than not working at all. This could be helpful to you. If your employee works part-time hours, they can be on-hand to train the person who replaces them, and they are still available if you have questions. A worker who has been with your company for a long time may know answers to questions that newer employees don’t – for example, why a decision was made, what the process was before that decision, and other obscure information that may have been lost to time. These can be important insights, and you don’t want to lose them. If your employee reduces their hours and works slowly toward a full retirement, you will have more time to document information like this.

Another topic that may be helpful to discuss is retirement planning. If your company has a 401(k) plan, especially if you match contributions, be sure to inform your employees about the details and encourage them to participate. You should let team members know that they should begin contributing as soon as they are eligible. Additionally, you may want to provide access to financial planning. There are many financial wellness tools that you can provide for your employees that can help them with this, PrestigePEO offers FinFit to clients, which provides everything from college savings plans, how to save and where to limit spending, as well as financial counseling available over the phone at any time, and at no additional cost. By providing your employees with tools to help them save for their future, you make retirement attainable and less intimidating.

When discussing retirement with an older employee, you need to be very careful about how you approach the conversation and the language you use. It is perfectly fine to inquire about retirement plans with an older employee and it is well within your rights as an employer. You can’t force them to retire, however, and if the employee reacts negatively to the conversation, you should drop it immediately. It’s recommended to seek professional advice to help you plan how to have this conversation. For our clients, we encourage you to reach out to your HRBP for advice. We can give you talking points, language to use, things to avoid, as well as legal advice if you have concerns.

One way to avoid singling anyone out, and therefore avoiding age discrimination altogether, is to hold meetings with all employees individually. You can discuss career development and that conversation will look different for everyone. A younger employee may want to discuss advancement opportunities, and an older employee may feel more comfortable discussing their plans to wind down their career. Career development and growth are crucial to any employee, so these meetings are a good idea to host regardless of whether you plan to discuss retirement with one or more individuals.

It’s important to plan carefully before you bring up retirement with an employee, so you should know applicable local and federal laws regarding this topic. When you become a client of PrestigePEO, we are more than happy to assist you with these conversations and other challenging topics. We have a team of experts that you can rely on to inform you of any legal issues you should be aware of, and we’ll make sure you are fully prepared. The reason why you need to prepare is that it is illegal to force an employee to retire because of their age. In 2018, an oral surgery practice in Michigan had to pay a $47,000 settlement to an employee who was fired four days after her 65^th birthday. The practice had a policy that required employees to retire at age 65, which is why they terminated her, but this is not a legal policy.

There are very few cases in which an employer is permitted to force employees to retire at a certain age. However, they are not required to enforce this – it is merely permitted to have mandatory retirement in these situations. Those cases include the following:

• Executives in very high leadership or policy-making positions may be required to retire at age 65
• Those in physical jobs, like a firefighter or a police officer, may be required to retire at age 57 upon reaching 20 years of service
• Pilots serve a very demanding and important role, and they may be required to retire at age 65

For the vast majority of employees, a policy that requires people to retire at a certain age is not legal, so if your company has such a policy you may want to reexamine it. With thorough preparation and an open mind, discussing retirement can be a positive and constructive conversation.

With all these considerations in mind, you can see that discussing retirement with your employees doesn’t have to be daunting. As always, PrestigePEO is available to assist in retirement discussions and any other potentially difficult situation you may have with a team member. Please reach out to your HRBP for further assistance. If you’re not a client of Prestige and are interested in how we can help, we would love to chat further. Contact us at any time to learn more about our services.

Employers today need to be competitive about their employee benefits to attract talent and retain their best employees. One of the most important benefits an employer can offer is a 401(k) plan. Candidates often think about their financial futures when considering a new employer, and a 401(k) plan helps them to prepare.

But a 401(k) plan can be a lot to manage, and smaller employers are not always able to administer these programs. How do you offer these desirable benefits while keeping your business affordable? The answer is to partner with a PEO.

When you work with a PEO, you enter a co-employment relationship. You will still retain oversight and decision-making power over your company, while the PEO handles things like HR services, compliance, and payroll. For many small to mid-sized businesses, this is a hugely beneficial relationship. It also has the added benefit of reducing costs for employee benefits, as the PEO pools your employees with the other companies it has already partnered with, making the buying power much stronger.

When it comes to a 401(k) plan, how can a PEO make a difference? A PEO can offer you more affordable employee benefits than you could get on your own. Buying health insurance for 10 employees will have more associated fees than buying health insurance for 500 employees, and this is a huge reason many employers choose to partner with a PEO. This same reason comes into play when considering a 401(k) plan. The more plan participants you have, the less you will pay in fees, so your 401(k) plan will be more cost-effective with the help of a PEO.

Another significant benefit is that the PEO sustains the financial liability of the 401(k). When you sponsor a retirement plan, you have fiduciary liability. As a retirement plan sponsor and a fiduciary, you can be at personal risk of penalties, lawsuits, and fines If you fail to comply with all regulatory measures. When you utilize the 401(k) plan your PEO offers, you do not have this responsibility. The PEO will be responsible for all maintenance of the 401(k) plan, including maintaining ERISA** fidelity bond coverage, recordkeeping, and compliance monitoring. It is a lot for a small business to maintain on its own, but a PEO is uniquely positioned to specialize in these services. The PEO will have a team of experts in place to keep the retirement plan running smoothly, and you will not have to worry about it.

Not only are job candidates worried about their retirement plans, but so are state officials. States have begun to mandate retirement plans, meaning that employers may no longer have a choice about offering a 401(k). More than 30 states have considered this legislation, and many of them have either passed the legislation pending launch or have already signed it into law. To comply with these new laws, businesses will have to sponsor a retirement plan for their employees and incur the costs, administrative tasks, and compliance needs. This is not feasible for many employers, which is why partnering with a PEO is a great solution.

Offering retirement benefits can help to ensure that your team members are committed for the long run if you decide to match their contributions. It is not required, but many companies offer a certain percentage of matching contributions. It is also a very convincing tool for recruitment. A recent study reported that, for 45% of respondents, a 401(k) match was a deciding factor in whether or not a candidate took a job offer. Often, these contributions are only offered after the employee has been with the company for a certain amount of time, for example, after their first year. This gives your employees an incentive to stay with you, and the longer they stay, the more their 401(k) plan contributions will grow. It is a very effective way to encourage your employees to stay with your company. Plus, the employer gets a benefit as well – the matching contributions are tax-deductible! You can deduct the amount you matched from your company’s taxable income, which can be very profitable. It is a win-win situation!

For the retirement benefits, and for so many other reasons, partnering with a PEO is the right choice for small to mid-sized businesses. A PEO removes so many of the headaches of running a business, like HR services and onboarding, acquiring affordable and competitive employee benefits, figuring out how to stay compliant with the latest legislative updates, and the struggle of managing payroll. If you’re ready to experience the PrestigePEO difference, we’d love to talk! Contact us today to learn more about what we have to offer your business.

* Source: www.betterment.com/work/resources/maximize-your-401k-a-survey-for-employers

** Source: An ERISA fidelity bond is a type of insurance that protects the plan against losses caused by acts of fraud or dishonesty. www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/protect-your-employee-benefit-plan-with-an-erisa-fidelity-bond.pdf