Celebrating National Small Business Week: Construction on the Rise
posted by Fisher 401(k) May 5, 2017
This week is National Small Business Week, a time to reflect on the importance of small businesses to the American economy, and to our culture. We’re celebrating this year by taking a look at small businesses in a few industries we specialize in, including the healthcare industry and, in this article, the construction industry. What challenges do construction employers face when it comes to retirement plans? What are the keys to retirement success for the industry as a whole?
The Construction Industry is Building Steam
According to the U.S. Department of Labor, the construction industry is looking at a 19% growth in jobs through 2018, compared to 11% job growth for all U.S. industries. With that growth comes a new challenge for construction employers: There’s a shortage of skilled professionals, and a need for employers to stand out from the competition as they seek to attract and retain the talent they need—something they may be able to do using retirement benefits.
There’s a shortage of skilled professionals, and a need for employers to stand out from the competition as they seek to attract and retain the talent they need.
Retirement Challenges Facing Construction
Across all industries, 54% of American workers are participating in retirement plans of some kind, contributing money, and investing assets for growth. The construction industry falls quite a bit behind that average, with only 38% of construction professionals even having access to a retirement plan through their employer, and only 33% actually participating. That means the first big retirement challenge for the industry is one in adoption; there’s lots of room for employers in the industry to begin offering retirement benefits to their employees, or to make a greater number of workers eligible to receive those benefits.
Beyond simply offering plans, the next challenge is to get employees to actually use those plans and actively participate in their retirement planning. In our own poll of American workers, we learned that only 29% of respondents felt confident planning for their retirement with the resources they had access to through their employer. This statistic is perhaps of even greater relevance to construction professionals; in an industry where most employers do not offer retirement benefits, it’s likely that many employees will not be familiar with investing or best practices for contributing to their retirement plans. Marry that with the distrust that many industry workers have for anyone offering financial advice, and the need for reliable, trustworthy service becomes apparent.
Tips for Improving Retirement Planning and Saving for Construction Employees and Employers
This significant gap in the adoption of retirement benefits by employers in the construction industry presents a huge opportunity for those companies seeking to overcome the skills gap. Offering retirement benefits through a full-service 401(k) provider might be the one factor that causes a candidate to choose one job offer over the other. Here’s how you can make the most of your retirement benefits to attract and retain the talent you need:
- Offer a 401(k) plan: If you aren’t already offering a 401(k) plan, now Is the time to start. Look for service providers who will help you set up the right plan for your goals and your employees’ needs.
- Benchmark your participation and deferral rates: If you’re already offering a plan, but your employees aren’t participating the way you’d like, there’s a lot you and your service provider can do to improve participation and deferral rates. Benchmarking can help you and your service provider identify what’s working and what’s not, and help your employees better understand the plan and their retirement goals. That way, they’ll know how much they’ll need to contribute to reach those goals.
- Ask for more services from your provider: Finally, talk to your service provider about personalized services and individual attention for your employees. Every individual has their own unique set of circumstances and goals that will define their best approach to retirement planning. By gaining services like one-on-one financial meetings, you can help your employers see the value in the 401(k) plan you offer so you don’t lose them to the competition.
77% of American employees would rather work for an employer who offers educational 401(k) support for their employees over a 401(k) with no additional support.*
The construction industry is poised to build a brighter future and improve the retirement security of many of the nation’s workers. For many business owners, the answer to many of their needs may only be a 401(k) away from achieving their growth goals.