5 Reasons You Should Be Offering Your Employees a Match-Based Saving Plan
When it comes to benefits, the sheer number of options you could offer as an employer can be overwhelming. It’s indisputable that benefits are an essential part of your offerings to your employees, but how do you know what the best types to offer are, and how to do it on a budget that makes sense for your business?
If you’ve ever found yourself considering this dilemma, we have a suggestion for you: have you considered match-based saving? Match-based saving is an innovative type of benefits that’s gaining popularity across Canada with employers and employees alike. It’s similar to any other type of contribution matching program, like RRSP contributions, except employees save money in a third-party account and their employer matches their savings in liquid cash. As employees participate in the program, they grow their savings, create an emergency fund for themselves and improve their financial habits. If you’re interested in reading a more detailed description of how match-based saving works, click here.
Here are our top 5 reasons you should consider match-based saving for your team of employees:
1. You’ll be offering your employees something they want and need
As an employer, the ultimate point of offering your employees a benefits package is twofold: to give your employees a greater degree of support, but also for your business to gain from doing so (higher employee retention and engagement rates, minimized absenteeism and so on). For your investment in benefits to be effective, your employees have to really want and feel the gains created by your offerings.
Match-based saving plans fit that bill exactly. There’s nothing that’s more flexible or indisputably wanted than liquid cash - you’d be hard pressed to find an employee that doesn’t want more of it from you. Beyond just desire, match-based savings plans offer people the kind of extra financial support that really helps in the event of financial emergencies. Because they don’t have immediate access to the money they save through the plan, most employees let their savings grow undisturbed and spend their wages instead. In the event they actually need a boost of cash for any kind of financial shock, like an unexpected car repair, they’ll have a pool of money amplified by your contributions to call upon right away. They’ll be able to access that money, penalty-free, in a few business days and bounce back to focusing on work again faster than they’d be able to alone.
2. It’s a progressive option
Traditional types of benefits can be a bit restrictive in nature. For example, though everyone needs to save for retirement, RRSP contributions as a benefit are really only suited towards employees who are earning a considerable amount of income. When people save into an RRSP, they’re essentially committing to not seeing that money again for many years (otherwise, they’ll face a major tax bill if they withdraw it while they’re still working). Only people who can afford to part with their savings on a long-term basis and pay any administrative costs associated with the account can benefit from regular contribution matching from their employer.
Instead, a match-based saving program can be introduced in any workplace, regardless of how much the employees are earning or the industry they work in. The money saved as part of the plan can be put towards anything the employee chooses to put it towards, so while it could eventually be deposited into an RRSP, it could also go towards groceries during a tight month. Plus, all the money that employees save as part of the program is after-tax, meaning participants won’t face any penalties if and when they need to withdraw what they’ve saved.
As an example, QUBER facilitates a match-based saving program for Levi Strauss & Co. employees across Canada that work in Levi’s retail stores and distribution centres. These hourly-wage positions are not usually the type to traditionally come with a benefits package, but it’s important to remember that lower-wage earners usually need more support from their employers than those who have the type of jobs that offer traditional types of benefits. The employees who participate in the program save just $40 a month, matched by Levi’s, and get to build an emergency fund for themselves over the course of the program.
3. It’s easy to facilitate
As far as benefits packages go, match-based saving is one of the easiest to get going for your employees. Why? Because we can take care of it for you!
QUBER is an industry-leader in match-based saving in Canada and can easily customize our existing platform to fit your business’s needs. All you need to do is specify how much you’re willing to match for each employee, how long you want your program to run and we’ll take care of the rest!
It’s also intrinsic to the design of the program that your employees will take an active role and be able to independently make choices that suit them best. Though they don’t have direct control over the account they save into throughout the program, employees have full choice over when they want to cash out, what schedule they want to follow and if they want to skip a withdrawal or not. Plus, to participate in a match-based saving program through QUBER, employees only need to have a mobile phone and some level of access to Internet or wireless services to check the app periodically. As these are things that the vast majority of people already have, there aren’t any additional costs imposed on your employees to participate!
4. It encourages good financial habits
At face value, it would seem that giving your employees a raise would be the solution to any financial issues they may be experiencing. However, that neglects to acknowledge that part of the reason people struggle with money is due to the financial habits they practice. If you give someone who regularly spends their money impulsively a raise, they’re going to be much more likely to just increase their spending than save that extra boost.
Saving money is a bit like trying to get physically fit: it takes a long time for people to see the positive effects created by the hard work involved. Getting through that initial stage is critical, as when people actually have a small level of savings accumulated, they’re going to see the value in regular saving and be much more likely to try to and maintain what they have.
A match-based saving program is a great solution to this problem, as the plan requires that employees save money on a consistent basis and work to keep it saved as long as they can. This is important, as the habit of saving money (and automating your savings, as it’s done with QUBER), is an essential component of reaching financial security. Plus, for a person to make meaningful changes to their financial situation, they need the knowledge and appropriate tools to make better choices with what money they do earn. When you run a match-based saving program using QUBER, your employees will also gain access to a series of resources, contests and more that’ll encourage them to learn more about personal finance and how they can best protect themselves from all types of financial trouble.
5. It’ll boost your retention rates
Finally, when it comes to why people pick one job over another, more than just the salary matters. Benefits and perks are really important to most people, and the types of benefits your company offers says a lot about your company values and the culture you’re striving to cultivate.
A match-based benefits program recognizes that many Canadians need more financial support, particularly after a year of fluctuating economic conditions due to COVID-19. According to estimates from Morneau Shepell Ltd., 24% of Canadians are considering a job change due to the pandemic, with up to 36% of Canadians under the age of 40 debating a change. Plus, as we’ve highlighted numerous times, the lost wages, time and productivity created by financial stress represents a major drain on your business’s resources. Employees that are concerned about how the pandemic has (and may continue) to affect their financial situation simply can’t be the best employees they can be for your business.
Offering a match-based saving plan shows that your business cares about your employees’ well-being and has a vested interest in seeing them get past any financial issues they may encounter with ease. When employees know they have a pool of savings to fall back on, particularly if it’s been doubled or tripled by your contributions, they can move through life with a bit more peace of mind and arrive at work ready to focus on the task at hand. This kind of support will help display to your employees why it’s advantageous they stay with your business for a long time, and will increase the amount they’re able to contribute on any given work day.
If you’re a Canadian employer interested in adopting an innovative, impactful benefits package to retain your employees, reduce the effects of financial stress in the workplace and set yourself apart from your competitors, match-based saving benefits may be right for your business!
QUBER is an industry leader in Canadian match-based savings and can offer employers a customized experience using the QUBER platform to facilitate match-based savings with their employees. If you’re interested in seeing a demo of how QUBER can help strengthen your relationship with your employees, send us an email at contactus@quber.ca or visit our Employers page and send us a message using the contact form found at the bottom of the page.