When companies discuss employee retention, benefits like flexible hours or wellness perks often get the spotlight, but group retirement plans deserve equal attention. A strong retirement plan isn’t just about employee peace of mind; it’s also one of the smartest investments a business can make.
Offering a retirement plan doesn’t only help employees, it directly benefits your bottom line through increased retention, higher productivity, improved recruitment, and strategic tax advantages.
Let’s explore how providing financial security through group retirement plans can deliver meaningful, measurable returns for your business.
Reduced Employee Turnover: The Immediate ROI
One of the most expensive issues employers face is high employee turnover. Each time an employee leaves, the costs quickly accumulate: hiring replacements, onboarding, training, and lost productivity. Offering a comprehensive retirement plan can dramatically cut these costs.
In fact, RBC’s Beyond the Paycheck report (2024) highlights that Canadian businesses offering retirement benefits have turnover rates 20% lower than those without them.
ROI TIPS
Quantify your savings: Identify your organization’s current turnover rate and the associated recruitment and training costs. Use this data to project potential savings from improved retention. Even modest reductions in turnover can translate to tens of thousands of dollars saved annually.
Tailor your retirement plan communication: Clearly communicate retirement benefits during onboarding and annual reviews to remind employees of the value provided, reinforcing long-term loyalty.
Reducing Financial Stress Boosts Workplace Productivity
Employees who worry about their finances often struggle to perform their best at work. ADP Canada (2024) found that 58% of Canadians experience financial stress regularly, negatively impacting productivity, engagement, and absenteeism.
When employees have financial peace of mind, their productivity noticeably improves, creating significant returns for your business.
ROI Tips
Measure productivity changes: Track absenteeism, presenteeism, and productivity before and after implementing a retirement savings program. You’ll likely notice measurable improvements that directly contribute to your profitability.
Provide financial coaching: Offer personalized financial wellness programs or coaching alongside retirement benefits. Manulife Financial’s 2025 Retirement Preparedness Report shows that personalized financial coaching boosts productivity by reducing stress-related absenteeism.
Improved Recruitment and Talent Attraction
Top talent evaluates more than salary when considering job offers. Retirement benefits often tip the scales in your favor, distinguishing you as an employer who genuinely invests in employee futures. Mercer Canada’s 2024 Benefits Report found that 70% of Canadian job seekers prioritize strong retirement plans when choosing where to work.
Offering attractive retirement options allows your business to compete more effectively, drawing high-quality candidates who stay longer and contribute more meaningfully.
ROI Tips
Evaluate your employer branding: Highlight your retirement and financial wellness programs clearly in job postings and recruitment materials.
Measure recruitment outcomes: Track applicant quality and hiring metrics before and after enhancing retirement benefits. This data will quantify how improved benefits directly reduce recruitment costs and attract higher-quality candidates.
Strategic Tax Advantages and Cost Management
Beyond employee benefits, group retirement plans offer tangible tax advantages. Employer contributions to group retirement plans in Canada are tax-deductible expenses, reducing your overall corporate tax burden.
ROI TIPS
Consult with tax specialists: Work with financial experts to structure your plan contributions strategically, maximizing tax deductions while managing your overall employee compensation budget effectively.
Conduct regular cost-benefit analyses: Review the tax implications annually, adjusting contributions and structures to align with changing regulations or company objectives, thus optimizing financial outcomes for your business.
Practical Steps to Maximize ROI From Your Retirement Plan
Enhance the effectiveness of your group retirement plan by following these actionable steps:
1. Choose the Right Plan
Carefully select a retirement program (Group RRSP or Registered Pension Plans) that aligns best with your workforce demographics and company budget. The right plan ensures higher engagement, utilization, and satisfaction.
2. Prioritize Employee Education
Employees only value benefits they understand and use. Hold regular workshops, webinars, and financial coaching sessions, helping employees effectively engage with the retirement plan.
3. Track Utilization and Adjust Regularly
Regularly analyze benefit usage rates and gather employee feedback to adjust offerings as needed. Monitoring this data ensures continuous alignment between your benefits investment and employee preferences, maximizing your overall ROI.
Real-Life Success Story: Quantifying Results
Canadian businesses that strategically invest in retirement plans consistently experience tangible returns, including:
1. Lower Employee Turnover Costs: Businesses reported an average 15-20% reduction in turnover costs after implementing robust retirement plans (Mercer Canada, 2024).
2. Higher Productivity Levels: Companies providing financial wellness resources saw employee productivity improvements averaging 12-18% (ADP Canada, 2024).
3. Improved Talent Acquisition: Employers prominently showcasing retirement benefits attracted a 25% increase in high-quality candidate applications compared to those without such plans (Mercer Canada, 2024).
These outcomes clearly demonstrate that group retirement plans do more than benefit employees; they directly enhance your financial performance and competitive position.
Financial Security: Your Competitive Advantage
Investing in your employees’ financial future isn’t just beneficial — It’s strategic. With measurable impacts on retention, productivity, recruitment, and your organization’s bottom line, a group retirement plan delivers meaningful returns for both your team and your business.
Ready to Strengthen Your Benefits Strategy?
PACE Consulting helps Canadian organizations design impactful group retirement solutions tailored specifically to their workforce. Let’s work together to leverage financial wellness as your competitive advantage.
Disclaimer
The information provided is for general informational purposes only and should not be considered financial or legal advice. Consult professional advisors for guidance specific to your organization. While we strive for accuracy, we assume no liability for any errors or omissions.
Sources
1. RBC (2024). Beyond the Paycheck: Employee Engagement Report.
2. ADP Canada (2024). Financial Wellness at Work Survey.
3. Mercer Canada (2024). Attraction and Retention Through Benefits Report.
4. Manulife Financial (2025). Canadian Retirement Preparedness Report.