Why is Your Retirement My Problem?

I'm a 401k salesman.

Don't get me wrong, I'm an HR generalist in the truest, small-company sense.  I source dozens of jobs a month, touch a lot of compensation issues, deal with safety, employee relations, and a dozen other things.  But the most common email I send to my employees around the world involves 401k eligibility, and, when I get up in front of a group, 401ks will probably be on the agenda.

So too frequently, my first in-person meeting with an employee includes a discussion of their 401k.  If they're in, they tell me that proudly.  If they're not, they tell me they've been meaning to sign up, and then hit me with questions.  It is the first thing that employees think to discuss when they run into someone “from HR”.

There's a problem with this arrangement.  As an organization, we should provide retirement funding — it's good for our employment brand, attracting talent, and it just “needs” to be part of the compensation package.  Plus, my company is employee owned; profit sharing and a 401k match is fundamentally giving money back to shareholders anyway!

But for any given individual, I really don't care if you're in the 401k.

That will come as a surprise to plenty of my employees.  I talk about 401k's with them a lot, and I think people are under the impression that I get a commission for signing them up.  I've even met employees who resist signing up simply because the plan is company sponsored, and they're suspicious of our ulterior motives.

So, her

e are some 401k facts from the employer's perspective:

  • Whether you sign up or not doesn't make a difference.  We don't make more money or save on costs if you're in, and it doesn't hurt anyone if you're not.  Except, you know, you.
  • There's no real talent driver here.  401k participation correlates to higher retention, but that could just as easily be because the people who aren't going to stay around also aren't going to sign up.  Me signing you up for a 401k doesn't make you perform better, or stay longer.
  • In this day and age, all grown-ups need to have retirement plans.  I shouldn't have to explain this to you, or even explain why putting away only 1% won't help you much either.
  • You and I won't know each other when you want to retire.  So, I won't be around to tell you “I told you so” when you discover that 40 years of not trusting your employer with tax deferred money catch up with you.
  • I kind of hate being defined by retirement plans.  There's nothing measurable there; I didn't recruit someone great, or restructure the organization to be more efficient.  All I'm doing is telling people to do something that, in a more reasonable world, they would do anyway.

This is just publicly venting; I'm going to keep “selling” 401ks.  But employees, please understand that I'm looking out for your interests, not mine.


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Steve Gifford
Steve Gifford, MBA, SPHR, is the Director of Human Resources for OEM America, a PEO of more than a hundred companies and more than two thousand employees. His company gives small businesses the buying power and HR expertise of a big company, but without the bureaucracy! In the past, he’s been the HR guy for marketing, manufacturing, retail, and government organizations. His first HR job was in the US Army during his second tour in Iraq, where every employee in his client group carried an automatic weapon. It helps him keep the problems of employees who show up to work late in perspective.

One Comment

  1. Tim says:


    Ugh, where to start – you’re dead wrong on this…

    1. It does matter if your employees sign up for 401K. Studies have shown that those with a retirement plan (401K) in place, are less likely to leave a company. That should be enough right there. Plus, it’s in there best interest, especially in cases where employers are matching, but it’s confusing for many people. So, we/HR people help them understand it, help them understand the benefit and they join and down the road, maybe 30 years, they’ll see the benefit and remember that HR guy who gently pushed them to sign up.

    2. Retirement plan design does have an impact on retention and talent attraction – just go ask someone working for a company with a great retirement plan if they want to leave or how easy it is for them to fill their open requisitions.

    3. Yes, you do need to explain to employees adult stuff – because many of them aren’t really adults, yet, or are adults, but don’t get adult stuff because they had bad role models growing up. This is what our organizations need from HR.

    As an HR Pro I became a huge 401K advocate and personally go and speak to those employees not taking advantage – it was worth my time for two reasons: 1. If they weren’t doing it, they were missing out on a huge benefit; 2. If they weren’t doing it, there was a reason – and most of those reasons were going to cause turnover. 401K became a great vehicle for me to have some very in-depth career conversations with some people.

    Great conversation starter!

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