Benefits play an integral role in employee retention

Posted on March 28, 2024 by Sunny South News

By Erika Mathieu
Sunny South News

With the rising costs of living, benefits are an important component of overall compensation considered by employees and job-seekers says Ken and Danielle Willoughby of Chambers Plan Employee Benefits, a non-profit group benefits insurance provider which brings coverage to over 30,000 small to mid-sized businesses across Canada.

According to a recent nation-wide survey, “more than a quarter, 28 per cent, of Canadian employers say they are expecting increased employee turnover this year,” explained Danielle during a March 21 online information session. According to the same survey, 37 per cent of respondents cited better pay and benefits elsewhere as the number one factor for high turnover rates.

“Sometimes people leave for reasons you don’t know, but it’s interesting that almost 40 per cent of employees are looking for better pay better benefits,” Danielle added.

“It’s a tough market out there right now to retain and recruit good employees, and so adding a competitive compensation package includes a benefit plan.”

Willoughby explained that benefits premiums paid out by an employer are 100 per cent deductible. This coupled with the fact that cost-sharing premiums with the employee allows for mutual “buy in”, which often results in more comprehensive benefits packages for employees. 

Individual plans, Willoughby said, may not offer the same levels of coverage available on a group basis. “The advantage of group coverage is, in most cases, it can be done with without medical underwriting, which is really key. So, people already have medical problems, they don’t have to worry about qualifying, but also (they) get access to much more comprehensive benefits and at a better range.”

In addition, extended medical and dental portion of a group benefits plan are not taxable benefits to your employees. “There certainly is preferred tax status with an employee benefits program.” 

“We’re seeing worse (health) outcomes. We are seeing an influx of more serious conditions. Now, it takes employees longer to return to work from illness or injury, when they don’t have a benefit plan. If you have a long-term disability plan in place, and an employee goes off on long-term disability, typically the insurance company is going to have a return to work program for that employee to get them back working sooner than them just going on leave indefinitely,” Willoughby noted.

“One of the biggest things that employees without benefits experience, is presenteeism,” added Ken.

Presenteeism refers to the loss of productivity in the workplace because of illness injury or, most commonly, mental health conditions. Among these mental health concerns, anxiety and depression remain two of the most common reasons employees experience presenteeism. 

“So by investing in an employee benefits program, you’re investing in their well-being and giving them resources so that they can combat some of these problems and be proactive with their health,” he continued.

“One of the biggest things is employees without benefits are likely to seek employment with benefits. When employees are transitioning between roles or between jobs, (as) part of their compensation, they’re looking for benefit programs,” particularly people living with chronic conditions. 

Investing in the well-being of employee offers resources to employees living with real conditions and barriers which can make life challenging or impossible without access to extended medical benefits. 

 “We are talking about this for investing in their well-being, but by doing that, you’re creating a healthy workforce,” Danielle said, and noted coverage for mental health supports and counselling, critical illness coverage, and tele-health and tele-medical services which provide access to people facing transportation or financial barriers which make commuting to or taking time off to attend in-person appointments challenging.

The presentation highlighted how benefits can factor heavily into better employee retention, especially in recent years as inflationary pressures have continued to compound. 

“Having a benefit plan in place gives employees the reassurance that they’re going to continue to be able to afford the services, even as cost increases, they can still have access to them,” Ken said. 

Although the cost to employers may be a deterrent, there is often a tangible return on investment with respect to boosted cost savings in lower turnover and increased productivity. 

“It’s an investment in the future, (an) investment in the future of your business, (reducing) employee turnover, attracting and retaining good talent. All those things. A benefits plan is a very cost effective way to do it and it can build a lot of loyalty,” Danielle said.