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Why Muslim Employees Aren't Participating in Your Company’s 401(k)

Why Muslim Employees Aren't Participating in Your Company’s 401(k)

Michaela Corning | i4cp

August 23, 2010

Making this type of option available for Muslims and other conscientious investors who may have different reasons for choosing not to support certain common 401(k) stocks can make a lasting impression. This may especially be considered a unique differentiator when so few companies currently offer Shari’ah-compliant investments. Another option is offering employees opportunity to invest in the company’s stock.

How important is this issue to Muslims? A few poll respondents indicated that they are considering leaving their current job in part to search for employers that offer Shari’ah-compliant plans or to become self-employed and thereby free to control their investments completely; nearly all (92%) of poll respondents said they would have a more favorable view of their employer if they offered this option. And one i4cp member company employee commented in an employee survey, “I personally consider not having an option for a Shari’ah-compliant retirement contribution a disservice on the part of the company against its Muslim employees (same for any employee with a strong preference in socially aware investment preference).”

In the global war for talent, this could be one more means to build a positive employer brand for attracting and retaining key talent. With drivers such as religious accommodation/inclusion and a growing social consciousness in investments by all employees, exploring these options can be a good way for an employer to make their compensation package stand out.

Additional sources:

- Islam’s growth affects workplace policies
- Muslim Americans: Middle Class & Mostly Mainstream
- Nokia launches new Ramadan downloadable apps
- No student tests on two Muslim holidays

Does your organization offer a Shari’ah compliant investment vehicle for its employees (primarily geared toward Muslims)? Does this accommodation take the form of specific mutual funds, the ability to direct the types of funds an individual invests in and/or company stock instead of a 401(k)? If yes, why? In order to build the employer brand, increase engagement or retention, etc? Does your organization offer other investment options that aren’t mentioned in this article?

Are there other issues regarding Muslims workers that you would like to discuss through a forum on the i4cp website or see addressed in a future blog?

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