Obligation or Option?

Scott Lewis, Senior Project Manager, MMR Constructors, Inc

Years ago, I worked on a project headed up by a client who always said, “Safety is a moral obligation.” And while I wholeheartedly agree with this, there are other things that should also carry the weight of that statement about obligation, yet are unfortunately more of an option.

Most definitely, we need our employees to work safely, not only because it is a moral obligation, but also because it is the law and our safety records have a direct impact on the financial stability of our companies. After 28 years in the construction industry, I believe the most overlooked obligation we have is the financial well-being of our employees. Now some of you may be thinking that this financial obligation means pay and benefits. While others of you may think of a Dave Ramsey style approach to personal finances. And even though both are important, pay and benefits are usually decisions considered when employees choose where they want to work, while personal spending habits are a topic I am wary of, because construction workers do not like being told how to spend the money they have earned. No, I am speaking about the moral obligation to teach our employees how retirement benefits work.

We tend to think that retirement planning is something that parents or grandparents should do, but what if they don’t? What if this knowledge is generational in nature as explained by Morgan Housel in his book ‘The Phycology of Money’? Thus, it falls as a moral obligation on employers to not only better explain their retirement programs, but to offer classes to bridge the generational divide that is present in our beliefs on money and retirement. I for one thoroughly believe this is the case and the fact that this moral obligation has direct effects on recruitment, retention, productivity, quality and safety.

A few years back a long-term employee of the company I work for told me he was leaving for $2.00 an hour more than he was making. I stood there on the job site in complete disbelief, because $2.00 an hour was only $4,160.00 a year based on a forty-hour work week. I spoke to him in length about what he was giving up, including the free health care he had earned for both him and his family, the vacation, the job security, still, nothing seemed to register other than $4,160.00 more per year. As we stood there further discussing his decision, I asked him how his retirement planning looked and the dumbfounded expression on his face said everything. I went into more detail, explaining how according to the Bureau of Labor Statistics the average retirement age of a construction worker was 58 and that according to those statistics he had about 14 years left. Again, his expression said it all and I asked him to come visit my office after he got off work and let me explain retirement planning with him before he made a rash decision over $2.00 per hour. He agreed.

He came into my office about 6pm and we sat side by side at my desk. So, with my computer opened to a retirement calculator, I explained that counting solely on social security for retirement was like trusting in the stability of a one-legged stool, unless he was a milkmaid, which he obviously wasn’t. I then explained that retiring with a paid off house and car added a second leg, but not much more stability. That is when I told him that his 401(k) and/ or IRA were the third leg that provided for a stable retirement plan. Over the next hour or so we worked on his retirement plan, running numerous scenarios through the online calculator and went over our company’s 401(k) plan. And while I am happy, he stayed with us, I am happier that he received the education he needed to secure his future.

You see that small interaction more than covered the “moral” part of the point I am trying to make in this article, but what about the “obligation” part? That one is as easy as an old commercial about a particular state’s cheese, where they spoke about happy cows making happy cheese. In my opinion, it is our obligation to ensure our employees are knowledgeable in how to become financially secure in their retirement, and by doing so we create happy employees. And happy employees are not as distracted. Happy employees are generally long-term employees who know your policies and procedures better than short term ones. Happy employees are also more productive, and their positive attitude is uplifting to everyone else around.

So, tell me, am I right in saying that teaching your employees how retirement benefits work a moral obligation?