Canadians are relying more and more on employer-sponsored health benefits to support their everyday lives, which is a reassuring sign that they’re being properly used. However the overwhelming majority of workers say they don’t meet their needs, and plan sponsors say that it’s impossible to offer every every benefit.
So where can plan sponsors go from here, and what is the best route in choosing the best option for your team?
[Survey] Employers say it’s impossible to offer all benefits demanded by employees
In Canada, the reliance on employer-sponsored health benefits is on the rise, yet many employees feel that the current offerings do not fully align with their needs.
A recent survey revealed that while employers acknowledge the significance of employee benefits in talent retention and attraction, 70% of them express that meeting all the benefits demands of employees is unfeasible. Additionally, the survey of over 500 Canadian hiring decision-makers highlighted that 42% noted that employees are requesting improved benefits this year compared to the previous year, citing the rising cost of living as a driving factor.
This issue poses a complex challenge for employers and employees alike, particularly concerning health benefits, an area of growing importance among Canadian workers. As employee expectations shift toward prioritizing mental health, well-being, and personalized benefits, plan sponsors must balance the tightrope of innovative benefits that directly impact their teams’ lives with cost control amidst ongoing economic uncertainty.
Embracing stability through benefits in a volatile world
“The war for talent is no longer just about pay; benefits matter, and the ability to choose those benefits is important for adapting to employees’ changing needs.” – Benefits Canada
Recent studies indicate a rising reliance on employer-sponsored health benefits among Canadians, with a majority expressing discontent that the offered benefits fail to meet their needs fully.
This gap presents a compelling challenge for plan sponsors seeking to enhance the value and efficacy of health benefits provided to their workforce. Plan sponsors must understand the workforce’s diverse needs and preferences to bridge the disparity between employer-sponsored health benefits and employee needs.
“Turnover can cost up to 150% of the departing employee’s salary.”
Employee turnover places an incredible strain on the remaining staff and can cost an organization up to 150% of the departing employee’s salary.
Amid an evolving employee benefits landscape, a recent report showed that 59% of employers have altered their benefits to retain or attract new talent, showing a significant rise from 51% in 2022 to include the following:
- Cost-of-living raises,
- Increased paid time off,
- Customizable benefits packages,
- Additional health-care incentives (e.g., gym memberships, mental health resources)
- Improved retirement plans,
- Nutrition counselling,
- Preventative health screenings,
- And increased sick leave.
Changing perceptions of job loyalty – a shift towards stability and security
Benefits offer a sense of security. It’s punctuated even more with recent reports in the U.S. that show 72% of employees choose to remain with their current employer primarily to maintain pay, benefits, and overall job security. This preference for stability and security poses an intriguing question – is this emerging trend indicative of a larger shift in the workforce landscape?
The traditional notion of job loyalty, once associated with a long-term commitment to a single employer, may evolve towards a more pragmatic approach focused on financial security and predictability, with benefits offered to support young families. And now, employees are recognizing the value of stability in times of flux.
As the workforce landscape evolves in response to economic realities and external disruptions, the emphasis on pay and job security as primary determinants of employee loyalty may usher in a new era of workplace preferences. So, while employer-sponsored health benefits are undoubtedly valuable, there’s always room for improvement for plan sponsors to remain connected to their workforce while watching emerging trends to offer coverage expansion outside of the traditional package, new ways to enhance mental health support, and more flexible benefits to suit individual needs.
It’s undoubtedly a balancing act. Although providing every desired benefit to each employee may not be feasible, selecting the ones who align best with the workforce is crucial—investing in employees is key to fostering retention and driving organizational growth.