By Dan Eisner, Employee Benefits Advisor
Open Office Concepts and Employee Benefits
It was only a few years ago that the “open office concept” became all the rage for businesses. The original idea was that having people working more closely together would encourage creativity, collaboration and open communications. After the wave of early adopters, other businesses followed to “keep up with the Jones” or followed in order to be regarded as being “hip and trendy”, and still some others really were simply trying to reduce real estate costs and used this concept as the rationale.
However, many of those companies that introduced an open office concept are now questioning their decisions. Unfortunately, emerging research is indicating that these office designs may not be achieving the previously intended results. Workers may not necessarily feel motivated to collaborate more often and face-to-face time can actually drop. As well, workers are often nervous about disturbing their co-workers, who may be sitting right next to them – email communication amongst team members has ironically increased even though they are usually sitting very close by. Some offices are now designating “noise-free” areas or are providing noise-cancelling headsets.
In much the same way, some revolutionary ideas came about a few years ago with respect to employee benefits. “Disruptors” in the employee benefits industry, as they have become known, started to abandon the idea of a traditional benefits program in exchange for one loaded with more “perquisites” rather than “benefits”. Some employee groups loved the ideas and demanded more, particularly Millennial and now Gen-Z employee groups.
However, here too things have been changing, both with respect to the employee benefits being provided and those Disruptors that were promoting them. Many employers have realized that the move to a more perquisite-heavy benefits plan, with taxable spending accounts, can lead to significantly higher per capita costs. This concern is certainly going to weigh heavier on these employers if the economy continues to move towards an economic recession. As well, many of the employee groups who initially preferred these types of plans are now getting older, getting married and having children, and these employees are starting to realize there is real value for employee benefits like Life, Long Term Disability and Drug insurance. These types of benefits are the ones that you hope to never have to claim but they are also the benefits that should allow you to sleep at night knowing that you have coverage if you or your family ever need it.
So there are certainly still companies for whom an open office concept works and, likewise, there are companies for whom spending accounts are more important than traditional benefits. However, it is important to note that there was never really a need to “throw the baby out with the bathwater”. It is true that traditional employee benefits plans have largely remained unchanged over the last 20 or 30 years, but there is still value in many of the major elements of those traditional plans. Companies need to assess the “reputational risk” of not providing traditional catastrophic benefits coverage if an employee were to need benefits and they did not provide them.
At ZLC Financial, we believe the better approach is to update traditional plans with focused changes based on employee needs and desires, balanced with a sustainable approach from a financial perspective. Spending accounts, both taxable and non-taxable, provide enhanced choice and flexibility to employees and thus help in attracting and retaining key talent to run the business. Benefits plan sponsors need to not only assess which, or whether both, of these spending accounts make the most sense to the business, but they also need to assess how to finance them. Is there really more money available? Do these benefits need to be financed from existing plans? If the latter, how do you best do that?
We cannot necessarily help you with the design of your office but we can help with the assessment of your current employee benefits plan and help companies find the best solution for you. Each organization’s needs are unique and warrant a customized solution. We would be pleased to discuss your specific situation with you to identify the best strategy with respect to your employee benefits program. Should you have any questions about the above, please don’t hesitate to contact me or a member of our team.
At ZLC Financial we are one of the fastest-growing employee benefits advisors in Western Canada and we are fortunate to have the best people, resources and clients. We provide value to you by leveraging one of the most skilled benefits teams – collectively almost 300 years of experience within our team of 16 employee benefits specialists. We have been working with businesses ranging from 3 to over 70,000 plan members for over 30 years. Visit our Employee Benefits Page to learn more about our benefits plans.
This information is designed to educate and inform you of strategies and products currently available. As each individual’s circumstances differ, it is important to review the suitability of these concepts for your particular needs with a qualified advisor.