Rethinking the employee compensation package
A seismic shift in the workplace is happening. As the economy recovers, an undersupply of workers is concerning Canadian businesses, impeding their growth and compromising their competitiveness.1
The tight labour market is the result of a variety of factors such as fewer applicants, underskilled people applying, and furloughed and laid-off employees finding work elsewhere. The problem is amplified by an aging population leaving the workforce.2 Dubbed as the “great resignation”, the labour scarcity is expected to continue for years. The Global Workforce Hopes and Fears Survey found that one in five workers globally plans to quit their job in 2022.3
Companies unable to recruit and retain the talent they need are having to get more creative with their total compensation package - not just in terms of salary, but in terms of personalized, flexible benefits that prospective employees want.
Taking a holistic view of the compensation package.
The overabundance of job openings means there are more options for employees. They have more control and flexibility in looking for work that meets their expectations and aligns with their values, which have changed since the pandemic began. What candidates want is to work for an employer that prioritizes the health and wellness of their people. In fact, 77% of employees said they would leave their current organization for one that would offer them better support for their wellbeing (even with a lower salary).4
A survey conducted by The Conference Board of Canada together with TELUS Health found a gap of up to 83% between the benefits Canadian employees have and the benefits they want from their employers.5 This gap is significant enough to create employee disengagement and potentially lead to staff turnover.
“The survey was designed to gain a deeper understanding of the current and evolving needs of Canada’s workforce amidst a global pandemic when it comes to their health needs,” said Lauren Florko, Senior Research Associate, The Conference Board of Canada. “We found that 33% - 59% of respondents said that health and wellness support offered by their employers does not reflect their current needs.”
According to a new survey by Robert Half Canada Inc, 49% of respondents say benefits are the second-most important factor when considering job offers.6
If they are to differentiate themselves, make their employees feel valued and appreciated, and increase retention, Canadian employers need to take a holistic view of their compensation package.
Often, “compensation” is thought of as salary, but it is only one part of a total compensation package, which should also take the following into consideration:
- Financial benefits such as pension plans and retirement savings plans and profit sharing.
- Personalized health services including basic dental, eye exams, glasses/contacts, and prescription drugs for all employees (including part-time employees) and their family members.
- Mental and emotional health resources, wellness groups, check-ins to monitor progress, and surveys to measure engagement - helping to stave off employee burnout and fatigue.
- On-demand, 24/7 access to health and wellness services, and financial and legal assistance programs such as Virtual Care, LifeJourneyTM and Specialized Digital Therapy allowing employees to easily and proactively fit primary care and mental health support into their day-to-day lives.
- Flexible work arrangements, including working from home, to help employees overcome concerns of long commutes and poor work/life balance. Flexwork and telework have increased in importance for employees, with 65% and 72% (respectively) of respondents rating them as essential.7
- Unique perks such as gym memberships, free daycare, training stipend, paid volunteer days, and tuition reimbursement.
The real return on investing in a happier, healthier workforce.
Naturally, employers will want to evaluate their return on investment or ROI for a total compensation plan. Traditionally, they will look at financial outcomes such as savings realized from fewer claims. But there are other ways to evaluate the impact of a total compensation plan on an organization beyond medical savings.
Value on investment or VOI looks at how a program affects qualitative business attributes such as morale, recruitment, retention, satisfaction, presenteeism, and engagement.
A valued, cared-for workforce will be more engaged and more productive. Engaged employees take fewer sick days, and may remain with their company longer.8 Additionally, an organization that demonstrates genuine concern for the health and wellbeing of its people and their families will stand out in a competitive labour market, finding it easier to recruit and retain good talent.9 The result is a happier, healthier workforce overall - and that’s where the real value lies.