Header Image Credit: Weedit Network
Cannabis Companies Need to Explore Employee Benefits NOW
The Coronavirus Pandemic has left millions of Americans without jobs, forcing about 26.5 million people to file for unemployment over the course of just 5 weeks. To put that in perspective, 1 out of 6 U.S. workers is unemployed right now. One of the world’s most established economists, Janet L. Yellen, stated that the United States is facing the worst level of unemployment since the Great Depression. With the peak of the virus approaching, state lockdowns are expected to remain in the coming weeks, forcing further business closures.
As the Coronavirus continues to wreak havoc across the nation, a positive change comes in the form of government officials deeming cannabis as an “essential business.” One of only a few industries permitted to remain open and continue operations, legal cannabis shops are experiencing unprecedented levels of demand. Dispensaries are being flooded with pickup and delivery orders as Americans use the healing benefits of cannabis to cope with the high levels of stress and anxiety related to COVID-19.
“We are hiring to give some of our staff a break, and so if people don’t feel well, they don’t have to come in.” -Timothy Dodd, CEO of Sweet Flower Dispensary, Los Angeles CA
To keep up with the rising demand, many cannabis companies are looking to ramp up hiring efforts to ensure their current staff doesn’t feel overwhelmed. However, past research has shown that since the initial legalization of marijuana in various states, cannabis companies have struggled to acquire and maintain workers. In Washington and Colorado, two of the highest grossing legal states, budtender turnover rates are as high as 47% and 38% respectively. A high turnover rate not only wastes time and resources, but it also costs money which could instead be used to further grow a business. A 2017 study, conducted by Employee Business News, found that it costs employers 33% of a worker’s annual salary to hire a replacement should an employee choose to leave.
“The general overview of dispensary budtenders is that they don’t tend to stay around long as the job role has a high turnover rate. In fact, nearly 60% of employees don’t last past two months – and only 40% make it past the first. To make new hires worth the time and cost, retention is essential; otherwise, any hiring dispensary will be hemorrhaging time and money that could otherwise be directed into the growth of the business.” Source: National Cannabis Industry Association
So why are cannabis companies experiencing these elevated turnover rates?
Employee benefits play a major role in attracting and retaining workers. At the end of the day, working employees are the key element that makes business possible. Offering benefits to your employees demonstrates that you are invested in their overall well-being and that you care about their financial future. Work Institute’s 2019 Retention Report found that “The percentage of interviewees citing benefits as the most important reason for leaving has increased more than 100% since 2010.” Benefits are becoming an aspect of compensation that employees are actively searching and demanding for when exploring the job market.
A common misconception shared among business owners is that they can make up for the lack of employee benefits through increased pay. However, a study conducted by Glassdoor found that the majority of individuals in the workforce do not agree with that philosophy. In fact, nearly 80% of workers would prefer new or additional benefits over a pay raise. Furthermore, 90% of individuals ages 18 to 34 prefer benefits over increased pay. This is particularly important considering the majority of workers in the cannabis industry are under 30 years of age. In today’s market, compensation based entirely on salary is not going suffice. Job candidates are searching for the complete package in order to enhance their overall quality of life.
Which employee benefit should I implement?
In addition to health care and paid vacation time, 401(k) plans are among the most sought-after benefits employees are seeking right now. Workers want the ability to invest in their financial future, and retirement plans, like 401(k)s and Cash Balance Plans, are a great way to do just that. According to a 2019 Vangst Salary Survey, only 19.2% of companies in the cannabis industry offer their employees a 401(k).
“401(k)s are great,” Janine Bush, president of Cannabis Staffing Group has said. “If an organization is providing a match to the employees’ contribution, it can be a very effective recruitment tool that will set your organization apart from the competition.”
With cannabis being federally illegal, offering 401(k) retirement plans to employees hasn’t been possible in the past. However, this is no longer the case. The experts at Leading Retirement Solutions are one of the first retirement plan providers to offer employee benefit packages to companies in the cannabis industry. Offering these benefits to your employees not only helps your company stand out from the competition, but it allows your company to stay ahead of the curve. Considering several states have recently classified cannabis as essential, many politicians believe federal legalization is just around the corner. When that becomes a reality, offering employee benefits will no longer be optional; it will be a requirement to remain competitive.
The Leading Cannabis 401(k)® Plan and the Leading Cannabis Cash Balance Plan are employee benefit packages crafted by a team of financial, legal, and retirement industry veterans. Each retirement plan option was designed specifically for companies in the cannabis industry. Similar to the standard 401(k) and cash balance plan you are accustom to, the Leading Cannabis 401(k)® Plan and the Leading Cannabis Cash Balance Plan are above board and in complete compliance with government regulation. For more information check out our main page for answers to the most common cannabis related questions.
Be sure to follow our new Instagram account for cannabis and retirement plan related content.
For more tips and information regarding retirement plans, contact us.
