Advisor, ZLC Employee Benefits Solutions
When we ask employers why they include employee benefit
s as a part of their broader HR/compensation programs we often receive a variety of answers. Many of the same responses come up consistently: to attract, retain, or engage. Other employers say they want to improve the long-term health of their employees and thus improve operational productivity. Others reference an objective to provide peace of mind to employees, as they want to ensure employees are not placed under undue financial burden in the event of serious illness or injury resulting in loss of income or high medical bills.
When we ask employees for their perspective, they often continue to highlight the importance of benefits programs in their decisions to join or remain with an employer. Approximately 49% of Canadians surveyed indicated that benefits were a priority for accepting one job offer over another – 2nd only to salary (as per Robert Half Canada Inc. – May/19). More interesting is that employees also have a sentiment of entitlement, with 77% of Canadians surveyed feeling that all employees are entitled to receive a health benefits plan from their employer (Sun Life Canadian Health Index – Feb/17). While some of these statistics are a couple of years old, we have not observed much of a change in these trends in the market.
In terms of “wants”, a more recent trend we are seeing is that employees are placing a higher perceived value on coverage for regular or routine health and dental care costs as compared to insurance coverage for serious or catastrophic events. It begs the question as to whether employees now see their employee benefits programs as a source of “perquisites” or “consumables”? Are employees forgetting the financial risk of serious illness and/or injury or would employees rather just “spend” their benefits program dollars? This trend is tied to the increasing number of spending accounts being implemented over the last couple of years, specifically designed to cover day-to-day expenses. This begs the question whether employee benefits plan sponsors should give employees what they “want” right now, or what they “need” in the long term.
In terms of “needs”, we know there is huge value in the types of employee benefits that we hope to never use. Personally, I sleep well at night knowing that there will be a life insurance benefit cheque available to my family if I were to pass away. I also don’t worry as much about my monthly mortgage payment if I were unable to work, knowing that there would be a monthly disability benefit cheque. As well, it is very reassuring for me to know that I am covered for high-cost drugs not covered by the government if I were to become very sick and required them. Again, personally I hope to never make a claim for any of these benefits, but I feel much more secure that I have them and wouldn’t trade them away.
There is no standard solution or preferred benefits plan design for all benefits plan sponsors unless their budget is unlimited. There is simply no one solution that meets both of the objectives of wants and needs. That said, plan sponsors need to feel confident that their benefits plan will take care of their employees in their times of need but might also want to ensure that employees feel supported when it comes to their more routine expenses. The good news is that there is a broad range of solutions available once a benefits plan sponsor confirms what they would like to achieve with their employee benefits program. Regardless of whether they want to provide what employees need, or what they want, or a little of both, or even a little bit more of one over the other.
ZLC Employee Benefits Solutions is one of the fastest growing advisors for employee benefits and group retirement programs in Vancouver 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 over 400 years of experience within our team of 19 employee benefits specialists. We have been working with businesses ranging from 3 to over 75,000 plan members for over 35 years.