Retirement coverage is not universal, and any employer can find it challenging not only to cover employees, but also to motivate them to participate in the retirement plan that it offers. But it can be particularly challenging for some industry sectors.
Leaders from one sector—post-acute care providers—at the recent SPARK Forum shared their experiences and the challenges they face in providing retirement plan coverage. The panel, moderated by Rachel Duncan Vice President, Relationship Management at Lincoln Financial Group, included Diana Curran, Vice President of People & Culture Signature HealthCARE; Michael Karicher, Chief People Officer at Sonida Senior Living Corporation; and Joey Leonhardt, Vice President of Human Resources at Care Initiatives.
The Workforces and Companies
Panelists’ workforces shared many similarities.
Demographics. Karicher said that Sonida’s workforce is primarily made up of millennials and members of Gen Z. Curran and Leonhardt said their companies also have young workforces. 
Wages. Employees at these companies earn between $17 per hour (Sonida) and $25 per hour (Signature).
Building a Workforce. All three executives said that building and maintaining their workforces was a challenge. Curran and Karicher cited the difficulty of attracting employees; for Leonhardt, the problem was not recruiting new employees as much as it was keeping them. “It makes it very hard for us to build our workforce,” said Leonhardt of Care Initiatives. All three reported very high turnover rates: Signature, 87%; Sonida, more than 90%; and Care Initiatives, 100%.
Communicating with Employees. None of the three use email to communicate with employees about human resources issues and benefits, the executives reported. Signature HealthCARE, Sonida, and Care Initiatives all use apps to make it possible for employees to access information; Care Initiatives does so through its benefits portal.
Employee Match. Karicher reported that Sonida has an employee match, but that it is low—1%-2%. Leonhardt said that Care Initiatives dropped theirs, and Signature similarly, does not have one, according to Curran.
Attitudes Toward Retirement Preparation
Care Initiatives employees are not looking at their retirement, said Leonhardt—they are looking for the best take-home pay. “They don’t understand” about the importance of retirement saving, he said, noting, “they’re living day to day.”
That attitude is not necessarily ameliorated by higher salaries, Leonhardt added. He observed that those at Care Initiatives who started as low-income employees and came up through the ranks may continue to hold short-term attitudes toward income and retirement saving they held when they earned less and were less able to save.
None of the three report high participation in the retirement plans they offer. Signature has the highest, with 41% of employees participating in their 401(k) plan; just 13% of Sonida’s employees participate in their 401(k), and 13% of Care Initiatives’ employees participate in their 403(b) plan. Average deferral rates are between 5.5% and 7.34%.
Shut it Down?
With the difficulties in getting employees to participate in the retirement plans they offer and attitudes some employees evince toward long-term saving, do the companies regard it as not worth the effort? Duncan asked the executives if any of them had pondered shutting their retirement plans down.
Curran and Karicher said their companies had no plans to do so; Leonhardt responded that while he didn’t know whether Care Initiatives would do that, they did stop their employee match.
Strategies
Curran, Karicher, and Leonhardt all reported that the biggest reason employees leave their workforces is to find jobs with higher salaries. Curran remarked that Signature could fund an employer match with the money it spends on employment agencies for assistance in recruiting employees.
But recognizing the effect of wage levels on retention rates does not mean that it’s easy to address that matter. “I would love to pay them more, but the money isn’t there,” said Leonhardt. Curran said that higher wages at Signature are “just not feasible.” Rather, said Curran, “There have to be other benefits” to attract and retain employees.
Care Initiatives is hoping to restore their employer match of employee contributions. Leonhardt noted that not having one hurts their recruitment efforts—especially regarding higher-level employees.
Making presentations to employees about retirement saving during annual enrollment can be a mistake, Leonhardt indicated. “It gets lost in the fog,” he said of what happened when Care Initiatives has made such presentations while employees are making choices about other aspects of their benefits coverage. They’re just focused on other things, Leonhardt said.
Instead, Leonhardt added, Care Initiatives has found that it is most effective to make presentations to employees about retirement saving and its plan at times other than annual enrollment.
The Bigger Picture
Panelists questioned the utility of the 401(k) model for their industry. “I just don’t think they understand the enormity” of saving for the future, remarked Leonhardt.
So what do employers in the care industry need from retirement professionals?
Education. Karicher said it would be helpful if retirement professionals would find ways to educate employees. Leonhardt argued that education is key—not just for employees, but in the school systems in general. “They’re not teaching that” in schools, he said regarding the importance of retirement saving—even in business schools. He argued that financial literacy should be part of curricula—including at the high school level.
Tailor your approach. “Get creative,” said Curran. She added that simplifying and personalizing the approach with employees is the way to increase participation in retirement plans.
Government activity. Curran responded that they would appreciate help from retirement professionals in securing activity by the government and officials to change the situation. Karicher, too, expressed interest in education and advocacy at the government level.
Take initiative. Leonhardt responded that they need help in reaching team members who don’t understand retirement plans and the importance of retirement saving. And he would like retirement plan professionals to take the initiative. “I don’t like to chase our vendors,” he said, adding, “They should be coming to me.”
“We need you to come alongside us,” said Leonhardt.
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