Retention through Embedded Retirement

In the rapidly evolving gig economy, where multiple avenues for earning have emerged, the challenge of retaining freelancers and gig workers has become increasingly daunting. To encourage task completion and ensure monthly minimums are met, various strategies such as discounts, cashbacks, and enticing perks are being deployed. However, amidst these efforts to retain talent, there exists a hidden tool that possesses the potential to revolutionize how workers perceive gig platforms and foster long-term commitment. This powerful tool is none other than embedded retirement—a game-changer in the realm of gig work.

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^{State of retirement in gig world}

While the gig economy has undoubtedly opened up numerous opportunities for flexible work arrangements and increased independence, it has also brought to light a significant issue: the lack of adequate retirement provisions for gig workers. Unlike traditional employees who often benefit from employer-sponsored retirement plans and the security of a predictable income stream in their golden years, gig workers are left grappling with the uncertainty of their financial future. With no employer to provide a retirement savings program or contribute to a pension, gig workers must navigate the complex landscape of personal financial planning and take on the responsibility of building their own retirement nest egg. This glaring gap in retirement support has raised concerns about the long-term financial well-being of those who contribute significantly to the gig economy and highlights the urgent need for innovative solutions that address this pressing issue.

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^‍How retirement increases retention

Retirement accounts have long been recognized for their characteristic pattern of consistent contributions and minimal withdrawals. People tend to be steadfast in their commitment to their retirement savings, rarely moving their accounts once established. This presents a unique opportunity for platforms operating in the gig economy. By offering embedded retirement accounts as part of their services, these platforms position themselves as not just a source of gig work, but also as the go-to platform for banking and other financial needs. When gig workers entrust their retirement savings to a specific platform, it creates a strong sense of loyalty and trust. This allegiance often extends beyond retirement planning, leading workers to rely on the platform for other financial services as well. As a result, the platform’s net profit margin can experience a notable increase. By recognizing the significance of retirement accounts in building long-term relationships and expanding their offerings, gig platforms can establish themselves as a comprehensive solution for gig workers’ financial needs, fostering a mutually beneficial partnership that goes far beyond the confines of retirement planning.

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Boost Growth with Matching contribution

A highly effective approach to bolstering savings, driving growth, and enhancing retention is through the implementation of a matching program. By introducing a matching contribution for user’s retirement savings, you inspire gig workers to embark on their savings journey with your platform. The inclusion of a vesting period for these matching contributions further solidifies user retention. This mutually beneficial arrangement not only strengthens the bond between your platform and its users but also cultivates a positive outcome for both parties involved. Embracing a matching program becomes a win-win scenario, fostering the prosperity of your platform and enabling customers to accelerate their financial goals.

Robinhood recently introduced the “1% Match Program,” offering a compelling incentive for IRA account holders. Under this program, Robinhood contributes up to 1% of the user’s contributions, with a maximum annual contribution of $65. To qualify for the match, the account must remain active for five years, ensuring a prolonged engagement with Robinhood’s investment services. Users have enthusiastically embraced this program, leading to remarkable results.

‍In just six months, Robinhood experienced a $500 million increase in assets and surpassed the previous year’s total number of brokerage and retirement accounts opened.

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Success for you and your users

As gig platforms strive to differentiate themselves and build loyalty among their workforce, providing access to retirement benefits can be a powerful incentive. By extending retirement savings options, platforms demonstrate a commitment to the financial well-being of their gig workers beyond the immediate task at hand. This not only helps to attract new talent but also encourages existing workers to stay onboard for the long term. The availability of retirement accounts not only provides a sense of stability and security for gig workers but also fosters a stronger sense of loyalty and investment in the platform they choose to work with. Moreover, it showcases the platform’s recognition of the unique needs of gig workers and their desire for financial stability, which can go a long way in building trust and solidifying relationships. Offering retirement accounts, therefore, serves as a powerful retention tool that not only benefits the gig workers themselves but also contributes to the overall success and sustainability of the platform.

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Start offering retirement accounts and grow your revenue and retention today!

Maximizing revenue and enhancing user retention are the paramount objectives for gig worker platforms in today’s competitive landscape. Elevate your net revenue and boost user loyalty by incorporating your very own retirement accounts through the innovative services of Feather.

Our seamless solution enables businesses to establish their own branded retirement accounts quickly and effortlessly, leaving behind the challenges of navigating intricate custodian relationships, compliance complexities, and burdensome back-office duties. With Feather, you can launch retirement products like IRAs in days, not months. Book a demo today to discover how you can grow alongside your users.

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