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Author: jjm1970 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 756708  
Subject: Re: 401-k- different approach (OT) Date: 2/21/2001 12:25 PM
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On a $50,000 gross salary, with 3% matching, the "cost savings" would be a maximum of around $5000. That probably won't even pay the cost of recruiting the replacement employee, to say nothing about training costs. Seems penny-wise and pound-foolish to me.

It's $5000 more than the company would have had if the employee left anyway without a vesting schedule.

I doubt anyone is leaving their job because their matching funds aren't vested yet. There are other reasons for job changes far more compelling.

Once they do leave, that $5k does offset some of the costs for recruiting, hiring, and training the replacement. Add to that the fact that the new employee probably doesn't qualify for the 401(k) for at least a year and you have a little more to help offset the costs.

Your right that it costs more than that will provide, all the more reason to make it less attractive for your employees to leave.

Jim
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