Small businesses are usually no match for larger companies when it comes to retirement packages. But low-cost consulting firms are making that a thing of the past.
Hiring and retaining top talent is a concern for smaller employers. They don’t usually have an in-house HR department, retirement benefits, analytical tools or money-management services for their employees. The cost tends to be too high and it takes time to manage and offer such benefits. So attracting top talent is tough, when larger companies can offer such enticing services.
But small businesses are starting to see the need for financial services, and they’re turning to consulting companies to provide them. Since it’s not enough to give employees a place to sock away that retirement money, the consulting firms offer all of the bells and whistles employees at large companies enjoy.
Companies who have started using consulting firms have reported an increase in plan participation because employees have ready access to their funds and can better plan using the retirement planning tools.
Services and prices vary by consulting firm. The cost tends to be between $15 and $19 per employee, not including consulting or other fees. Basic services include:
- features accessed through a Web site,
- daily updates of a fund’s value
- calculators to help employees determine if they’re saving enough to reach goals
- calculators to help employees figure out if they’re saving enough so they don’t out-live their money, and
- some firms will meet with individual employees to help map out their retirement plan.
Some large investment companies, like Charles Schwab Corp, are picking up on the trend. They offer online support tools to smaller companies who open a retirement-savings plan with them.