The push-pull between cost-containment and competitive benefits arrangements.
When it comes to employee benefits, Canadian employers face a complex struggle. On one hand, they seek to attract and retain the best talent and on the other hand, they look to effectively manage what appears to be ever escalating benefit plan costs.
Key cost factors.
For many years, cost containment has been a top goal for employers. While the emphasis may have shifted somewhat as to the culprits applying pressure on expanding plan costs, the primary factors can be attributed to:
- Cost-shifting. When private sponsor benefit plans were first established, they were designed to supplement publicly funded government programs. Over the years, cut backs in healthcare services at both the provincial and federal level meant more costs needed to be absorbed by corporate Canada.
- Chronic disease and mental health issues. Based on a 2015 benchmarking survey conducted by The Conference Board of Canada, the average cost of providing benefits for employees is $8,330 per full-time equivalent. It's likely that this annual figure isn't going to decline any time soon given the rise in chronic disease and mental health issues being reported. The survey also highlighted that 52 percent of organizations reported increases in benefits costs for active employees, averaging 6.2 percent between 2013 and 2014.
- We're aging. As our population ages, so does the workforce and with it comes the potential for an increase in illness, injury and health-care costs.
- New prescription drugs. Fewer drugs are coming off patent while more new, improved or repackaged medications, available in easy to take formats, are driving up consumer demand. Additionally, more drugs are available to treat cancer and other illnesses, such as hepatitis C, carry with them a hefty price tag per protocol.
It's hard to take something away once its been given.
When employees have been offered a benefit package, it isn't easy to modify in a way that reduces employer cost without risking the possibility of upsetting plan members and their eligible dependents. Keeping a close watch on avoiding employee dissatisfaction is important.
Since prescription drugs represent between 60 to 80 percent of most plans health care costs, employers tend to focus more of their attention in this area. Cost containment tactics include (but are not limited to):
- generic drug substitution;
- higher reimbursement percentages for generic drug use;
- changes to annual deductibles;
- encouraging employees to request 3 months' worth of a medication at a time in order to save on paying a per-script deductible every month (as well as the dispensing fee);
- changes to, or the introduction of, annual maximums.
Other non prescription drug related tactics include:
- changing vision care coverage
- limiting specific long term benefits (e.g., retirees or part-time employees)
- grandfathering benefits coverage
- introducing or enhancing health and wellness promotion programs
- introducing or promotion of health risk assessments and early intervention programs to reduce or eliminate absences and disability claims.
Build a strong communication campaign.
Regardless of the tactics considered, employers are well served when there is a comprehensive employee communication plan developed alongside any potential plan changes.
Communication tips to consider:
- tailored messages for different employee groups;
- ensure the change is clearly described including: why it is being introduced and what's in it for the employee (i.e. are benefit dollars being reinvested back into the plan to introduce or enhance a benefit?);
- use data and infographics or charts to illustrate what's happening through examples and simulations;
- start communicating pending changes as soon as possible;
- ensure the communications have a call to action especially if the employee is being asked to modify their role as a health care consumer.
We're here to help.
With the support of a trusted advisor, employers are able to focus more readily on developing and implementing creative plan designs that balance employee value while effectively managing plan costs. Frequent, relevant communication goes hand in hand with the introduction of any change.
With 30 years experience in the benefits industry, we invite you to contact us. We understand the importance of addressing rising costs while still engaging employees. Our goal is to ensure you meet yours. As ever, we're here to help so that you can focus on what you do best.
Why feedback matters.
Seeking feedback can benefit us for a few reasons: 1) we find out what we're doing well and should continue doing, and 2) we find out where we might consider changing course so that we can ensure we're tracking on a path to successful results.
Employers look for feedback from employees for similar reasons. When it comes to employee benefits surveys, the goal is to gain insights by eliminating guesswork.
The "Why" of Conducting Employee Benefits Satisfaction Surveys.
It is never a good idea to base a strategy on hunches. Empirical data comes from surveys and allows employers to find out:
- if employees are happy with their benefits package,
- what they don't like,
- what they wish would be provided;
- and what isn't much of value at all.
Employers know that it is ineffective and costly to provide a benefit that isn't considered a sought-after employee perk. The power of conducting a survey is to reach the widest respondent population possible and gather feedback in a way that doesn't come from other forms of regular employee contact.
So what's the goal?
These days, most employee surveys are conducted online and allow as many employees as possible to provide feedback through scaled responses or through open-ended comments. Survey results help employers learn ways to use their benefits dollars wisely. They also help with the HR or corporate goal of reducing turnover while attracting the best talent.
Communicate what's expected.
Survey completion rates are driven by a few key factors. Higher participation rates are generally a result of employees who are assured that their feedback is kept in strictest confidence with no possible backlash. They also know that their employer is truly listening and will do something with the feedback they gather.
Whenever feedback is sought, it sets up an expectation that benefits many change or be improved. It's important to have a communication strategy to outline the plan of action and purpose of the survey. Employees need to know what to expect and when.
What to look for in the survey.
No matter the size of the company, surveys should:
- be able to provide customized questions that let the employer get at heart of the issues they hope to address;
- include questions about current benefits and any new ones that are being considered;
- the opportunity for employees to rank their feedback and allow for sharing perspectives about trade-offs for current or new benefit options;
- reports that break out meaningful data while not breaching confidentially through granularity of data splicing;
- and if there are open-ended questions, a summary by theme of response type.
The value of benchmarking.
Employee Benefit Surveys allow a company to analyze organizational data to learn what employees value from the current offering as well as what they'd like that isn't yet available to them. Many survey vendors provide reports to benchmark one organization's aggregate survey results against others in the same industry. These results can prove invaluable particularly when looking to maintain a competitive edge and learn where a company may be falling behind.
There is so much that can be leveraged from the results of an employee benefits survey. Based on our years of experience, we see time and again that employees who are happy with their benefits prove to be more productive and loyal to their employer. Gathering feedback is a good way to keep on track and stay ahead of the competition. With so many ideas to share and ways to maximize your benefit dollar spend, we invite you to contact us. We're here to help so that you can focus on what you do best.
March means more than spring's arrival.
March ushers in the promise of spring whether any traces of snow remain or not. This third month of the year is also known on the Canadian health calendar as Nutrition Month.
In pursuit of a healthy bottomline.
With employees spending more than 1/3 of their lives at work or 60 percent of their waking hours per day in the office, it is no wonder that employers continue to look for ways to promote wellness through healthy eating in the workplace. Improved health and well-being can give a boost to productivity levels while driving up business performance. A myriad of studies show that healthy employees are 20 percent more productive than unhealthy ones. Additionally, employees who make proper dietary choices and focus on healthy weight management report fewer absences as well as short and long term disability claims.
Feed the gut, feed the brain.
Healthy eating also positively affects the brain. Since both the brain and body are made up of water, air and food, ensuring they are supplied with the right food is key. The body also has a second brain -- known as the gut-- where an entire nervous system exists. The gut and brain send messages back and forth to each other and when the gut isn't supplied with healthy ingredients, it can't send the right messages to the brain, thereby leaving it drained of what it needs to optimize its ability to focus and concentrate.
Brain food takes the form of protein, vegetables from all the colours of the rainbow, fish, as well as hemp, flaxseed, chia seeds. It's also important to avoid dips in blood sugar by eating brain food every 3 to 4 hours.
Feeding a healthy brain means increasing proteins and the key ingredients that fuel its neurotransmitters. The brain doesn't work well after the gut tries to digest non-nutritive, manufactured foods that have been altered through processing, starching and frying. Baked goods, sweeteners, too much caffeine, sugar, pop and alcohol also send the brain the wrong messages. They can make a person more anxious and may even lead to mental health issues such as depression.
What's in your vending machine?
Swap out the pop. Too often, it is easy to overlook what the workplace vending machines offers employees who seek a quick energy boost. The American Academy of Neurology reported that, aside from harming one's physical health, those who drank more than 4 cans of pop a day were 30 percent more likely to develop depression or other mental health problems.
Frequently stocked with a plethora of sugary soft drink choices, one of the easiest and best ways to influence healthy choices is by swapping out pop in the vending machines for water, fruit and/or vegetable juice (no added sugar), and carbonated water. These beverages offer employees an alternative free of calories, sugar and caffeine.
Fruit instead of candy bars. Those looking to help employees be happier at work may look no further than swapping out candy bars for fruit or offering free fruit in break rooms or beverage stations. Making it easy to choose a piece of fruit instead of something fattening from the vending machine not only is an important cancer prevention strategy, but for each fruit or veg portion eaten, there is a 40 percent greater level of protection against heart disease and stroke.
Employees who are healthier are also more productive. They promote a better culture and corporate image too. While making efforts to influence healthy eating at work is always a good thing, making the most of March as Nutrition Month provides ample opportunities to take advantage of many featured nutrition challenges. With so many resources at our fingertips, we're eager to share them with you and invite you to contact us. As always, we're here to help so that you can focus on what you do best.
Dave Dickinson, B.Comm, CFP, CLU, CHFC
Experienced Benefits Specialist ready to optimize your group benefits and pension plans.