With the high rate of unemployment in Uganda, many institutions are struggling to retain talented employees. Loyal employees are essential for long-term business success and stability. On this premise, when you find good, talented employees, you want to do everything in your power to keep them. Retaining the most productive personnel is easier said than done and yet attraction is very expensive for all organizations.

Think about the depressing costs of losing a good employee. Replacement costs including recruiting, interviewing, training and lost productivity is estimated at one and half times the annual salary of the departing employee. Fortunately, there are a lot of things you can do to create satisfied, happy employees that want to work with you forever. Owing to tight labour markets, employees are always looking for more attractive offers. Every employee will choose to work for an organization with the most attractive benefits. Therefore, for you to remain competitive and to ensure that you retain the best talent, ensure that your benefits meet or exceed those of your competitors in the labour market.

Many institutions have put in place several benefits including health insurance, transport, lunch, and housing, all of which are aimed at attracting and retaining high performing employees. But often times other equally attractive benefits like retirement plans have been overlooked and yet they have a long-haul benefit to employees and their families. Employees are yearning for financial security and retirement benefits matter a lot since they offer them retirement security. Even with the best efforts to retain your employees, naturally, when people stay in an organization for a while, they start looking at what they get besides their pay. Focus is often on other unique benefits offered by the employer and this is where the retirement benefit schemes come into play.

 A retirement benefits scheme is an arrangement under which an employer and/ or employee make contributions set aside for a worker’s future benefit in the form of annuity or a lump sum payable upon retirement, or upon death, termination of service or upon the occurrence of an event specified in the rules of engagement.

The Funds are invested and the earnings on the investments generate income to the worker upon retirement. A well-structured retirement benefits package that appeals to your employees will certainly contribute to reducing turnover. These retirement plans offer the best opportunity for distinguishing one workplace over another.

Empirically, multiple research which suggests that employees who feel financially secure have less excuses to be off duty and are more engaged. For instance; (i) A survey by Manulife and Ipsos Reid, 2015 suggested that employees with a workplace retirement savings plan were more than 50% more likely to report feeling financially prepared than those without such a plan. Moreover, financially prepared employees are as much as 20% more engaged in their work and up to 16% more productive. It is no doubt that when employees feel engaged and financially secure, they are happier, more productive and will not look for other jobs. (ii)  According to the 2011 Towers Watson Retirement Attitudes study, one third of responding employees said their retirement benefits were a primary reason for taking their current job and nearly half expressed that retirement benefits gave them a compelling reason to stay. The study indicated that there was a clear link between better benefits and a company’s ability to attract and retain employees.

 Arguments are also in place that with the retirement benefits in place, disenfranchised and underperforming employees might stay with the organization because they have a pension. The best way out of this is to find a mix that encourages retention of the best performers and maximizes productivity through small adjustments to the contribution levels based on performance. All this is evidence that employees are increasingly appreciating and valuing retirement plans. Therefore, employers need to seriously consider retirement plans as part of the overall benefits package because of the impact they have on employee retention. If you do not already have a retirement plan for your employees start laying foundation for one. If you already have one, take time to review your plan to make sure that it distinguishes you from other employers. Retirement plans are very powerful employee retention tools. However, careful thoughts have to be placed around the design and features of your retirement plan, as this will have meaningful effects on workers’ behavior.

Pensions have a strong influence on employees’ behaviors. Given their annual interest accumulation, they give younger employees a compelling reason to continue in employment with their current employer and the older employees are encouraged to retire on a timely basis. This therefore calls for concerted efforts in designing the best retirement plan that will strongly appeal to employees and create significant value for the organization through both attraction and retention of employees