Journal of Financial Planning: February 2023
Jessica Harrington, PCC, is an executive business coach with Carson Coaching. She holds a bachelor’s degree from Grand Valley State University and a master’s in leadership and organizational development from the University of Texas at Dallas. She’s passionate about partnering with firm owners to bridge the gap between their current situation and their desired success. Carson Coaching is the exclusive coaching partner of the Financial Planning Association. For more information, visit www.carsongroup.com/coaching.
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Competition is fierce right now in attracting and retaining top talent. Gone are the days of the onus being on job candidates to impress you—in this job market, you must also impress the candidates.
And good total compensation packages—salary, basic benefits, bonuses, and commissions—aren’t going to impress them much.
But as a small business owner, you have great flexibility to provide competitive benefits and make your firm an attractive place to work.
First, you need to offer a retirement benefit to your employees. You’re a financial adviser. You help people retire, and if you don’t prioritize that benefit in-house, what message are you conveying to a potential new hire? So, if you haven’t implemented a retirement package yet, stop reading, get that implemented, and then come back to read the rest of this article.
Now we’re ready to dive deeper into benefits—not just the standard benefits you’re likely already providing.
The Importance of Benefits
Now more than ever, you’re seeing firms proactively go after talent to reach people who are passively open to new opportunities, in addition to those who are actively applying.
Quality benefits play a critical role not just in attracting talent, but in retaining talent as well. Firms are doing exactly what I’m telling my coaching members to do: plucking out great people and offering higher compensation—and in many cases, better benefits. While compensation is a great way to attract and retain new hires, you need to also review total compensation annually to make sure you’re staying competitive.
Overall benefits are extremely important. This is because the next generation of talent is more focused on work–life harmony. They want to do work at a company they truly care about, they want to feel respected, and they want opportunities and benefits that matter to them.
HR Resources to Help with Benefits
Oftentimes, advisers don’t have a dedicated HR professional, so benefits planning and human resources can feel overwhelming. But there are helpful resources available to you.
First, reach out to a professional consultant or business coach who works with advisers. Also lean on your partner—whether it’s your broker–dealer, RIA, or office of supervisory jurisdiction.
You can also use resources from the Society of Human Resources Management (SHRM).1 An annual membership to SHRM costs $229 annually and comes with access to its “Ask an HR Advisor” service, where you can pose questions to HR professionals as they arise or subscribe to HR Magazine to stay up-to-date on key topics.
If you want to take it a step further, there are professional employer organizations (PEOs) to help administer your HR benefits. Not every PEO is created equal—you can use them for just payroll, or you could have a more robust HR representative—so outline what you need from a PEO and search accordingly. Searching for PEOs that are accredited through the Employer Services Assurance Corporation (ESAC) is a good place to start.
Buckets and Buckets of Benefits
For a long time, employers were doing a fantastic job if they offered retirement plans, paid time off, insurance, parental and family leave, retirement planning, and social events—and the employer likely got some tax benefits in return.
But today, benefits have evolved. More flexible workplaces and schedules have become the norm. Employee assistance programs (EAPs) and mental-healthcare are more important than they were in the past.
Here are the benefits “buckets” advisers may want to add to their firm:
Expanded core benefits. Benefits have expanded to include flex schedules, hybrid/remote work, and even commuter benefits (see the IRS Employer’s Tax Guide to Fringe Benefits2). For the latter, up to $280 per month for parking and $280 for mass transit can be excluded from employees’ taxable income. But another nice-to-have is something like giving your team members a $50 gas card when gas prices are outrageous or simply letting them work from home. For example, when gas prices were soaring earlier this year, Carson Group sent all stakeholders a $100 gift card to offset the costs.
Another valuable benefit is paid parental leave, which can be given to either parent so they can take time off after having or adopting a child without losing out on pay or time to bond with their little ones. Paid parental leave is at the discretion of the firm, and leave can range anywhere from 12 to 16 weeks, depending on the firm. HR Dive notes the longer the leave, the higher the retention among parents.3
Education benefits. Now until January 1, 2026, firms can exclude up to $5,250 of tuition reimbursement and student loan assistance from taxable income.4 Anything beyond $5,250 becomes part of your employee’s compensation, and they’ll be taxed on it.
Professional development. Professional development includes non-degree development programs, like certifications. Some companies put conferences and association dues under this umbrella too, but those are also good to have as standalone benefits.
Coaching and mentoring. What we see happening with our Carson Partner firms is that they will pay for every salaried person in their office to have a coach or mentor. Coaching is always a valuable benefit. Some advisers also provide support for employees to secure a mentor from a matching service, like the CFP Board Mentor Program.
Conference stipends. Conferences are a great way to connect with others and establish relationships across the industry, which can be difficult otherwise. This benefit is valuable to engaged employees.
Holistic wellness benefits. Consider offering dependent care, paid volunteer days or team volunteering activities, matching donations to nonprofits, wellness reimbursements, and/or discounts on memberships to health clubs or gyms. Some employers bring in yoga instructors a few times a month. Pet-friendly policies and subscriptions to industry publications or music streaming services like Spotify can be fun perks. Some firms even provide healthy food and beverages or discount programs for local services like car washes, dry cleaning, meal prep places, and phone services, among other things.
Identity theft protection. Some firms offer this benefit to protect stakeholders’ identities.
How to Implement New Employee Benefits
The idea isn’t to say tomorrow you’ll do all this. Rather, take inventory of what you’re doing today, do a compensation study if you haven’t done one—or if it’s been more than a year—and see what’s important to your team members. You can use a program like Officevibe, which offers a free version for under 10 people, or SurveyMonkey.
Pick one or two benefits to implement at a time. Some of these don’t cost anything. For example, it doesn’t cost anything to let your stakeholders bring their pets to the office a few times a month.
But if you’d rather delegate to experts for the higher-ticket benefits, like insurance, you can tap into resources like brokers, HR service companies, administrative service organizations (ASO), or professional employer organizations (PEO).
You might not be in a situation where you can give a ton of money for dependent care, but maybe you can allow parents or caregivers to go home early and work flex hours. It’s also amazing what offering $100 a month to stakeholders to put toward their student loans can do—it’s not always about the dollar amount, it’s about the employees feeling acknowledged and cared for.
Insurance can also be expensive, but you can use tools like health reimbursement agreements, where you provide a stipend to employees to seek out their own insurance plan on the marketplace.
In all this, however, it’s critical to connect with your company accountant or tax professional to ensure you’re making moves that make sense for your business.
It doesn’t have to be all or nothing. Good benefits that employees want can help them feel valued in a way they might not feel otherwise. It lets them know you care about them as a whole person. It tells them you want to create an environment that encourages them to be healthy and happy.
Endnotes
- See the Society of Human Resource Management at www.shrm.org.
- See IRS Publication 15-B (2022), Employer’s Tax Guide to Fringe Benefits at www.irs.gov/publications/p15b.
- See the HR Dive article, “Paid Leave Proves Critical for Talent Retention,” at www.hrdive.com/news/paid-family-leave-retention/604370.
- See the Forbes article, “The Why and How of Tax-Free Employer Student Loan Assistance,” at www.forbes.com/sites/ellevate/2021/04/08/the-why-and-how-of-tax-free-employer-student-loan-assistance/?sh=7a6f48878df0.