With December almost behind us, it will soon be time to step into the new year. January offers a fresh start and the opportunity to revisit your current group benefit plan design.
With over 30 years industry experience, I've seen a myriad of benefit plans in my day. This knowledge gives me the insight to ask key questions and because I keep a close eye on industry trends, legislative changes and different service provider/insurer product offerings, I'm able to ensure my clients have a plan design that optimizes their specific requirements.
Through the years, I've had a number of different requests related to benefit plan design, but the most common themes shared with me include --
- "It needs to be valued by our employees";
- "It needs to compare favourably to the competition";
- "It needs to provide just the right amount of coverage so that employees aren't over or under-covered".
- "It needs to help attract and retain talent."
Making sure that the benefit plan remains relevant and valued requires regular attention. Plan design models that were in vogue in the 1980s might not have the same impact for today's workforce. Advancements in technology, immigration and globalization have altered how we do business and how employees look at their benefits package.
Questions to have answered.
As you begin your benefit plan design review, consider these comprehensive questions:
- What is your benefits philosophy?
- Can you easily identify and communicate your top short and longer-term goals for the benefit plan?
- Do these benefit goals align and support the larger corporate objectives?
- Do you have a plan and method in place for analyzing your workforce demographics? Knowing the percentage make-up of your workplace cohorts as well as their current and future needs will provide insights important to the benefit plan analysis.
- Is your existing plan design compliant with current provincial and/or federal legislation?
- What pending legislative changes do you need to consider?
- What do you know about your competition's benefit plan?
- How does your plan stack up against others in your industry?
- What are the results of the plan funding arrangement review?
- Has your organization significantly changed in size?
- Is the current funding arrangement still the right one for you?
- Do you have a traditional insured arrangement and wonder if your company is a good candidate for a self insured or a more flexible solution?
- What does your claims experience reveal?
- Are claims being over or under-utilized?
- What are the cost patterns and how does it compare to other employers in your industry?
- What cost containment strategies should you consider as a result?
Look to a trusted adviser.
Working with a trusted and experienced adviser can help you stretch your benefit dollar, maximize your plan's effectiveness and highlight applicable tax advantages. At Gallagher Benefit Services Inc., we can help you identify pockets that your current plan doesn't include or where your plan might be improved. Please contact us. Together we'll discuss your goals and navigate your next benefit plan design review. As always, we're here to help so that you can focus on what you do best.
For some, it is the most wonderful time of the year while for others, it is a time of stressful worry and silent fretting. Media channels depict merry-goers rejoicing and spreading good cheer, but they fail to show the worry many experience after all the gifts have all been unwrapped and the stress of uncertainty sets in -- will there be enough money to cover the costs of all the holiday purchases?
How much do we spend this time of year?
According to CPA Canada, Canadians, on average, spend $766 on holiday gifts. Many spend well over $800 and too few set aside funds to cover their holiday purchases. As per CPA Canada, 61 per cent of those surveyed did not budget for the season.
Making the most of buyer's remorse
After the merriment of December dissipates, January's cold reality makes it stark appearance with the arrival of the previous month's credit card statement. Once the decorations are put away and the holiday parties are over, the season's frenetic pace is often replaced with pangs of guilt associated with buyers remorse. We ask in disbelief as we painfully peruse our credit card balance. "Did I really need all that stuff?"
Given many are faced with paying off holiday debts, it may seem like there couldn't be an appetite for information about debt management or ways to save more. For employers, the new year creates a prime opportunity to reinforce messages related to financial education, budgeting and debt management.
Employer Matching -- don't leave money on the table!
Consider January as a month to dial up pension plan communications and reinforce the value of "free money" employers offer through employer matching. Messages that remind employees about ways to harness the full value of their employer's matching contribution arrangement demonstrate the employer's role in helping them save even more.
Just-in-time communications can create a powerful impact especially at a time when employees might feel more confused or stressed about their financial situation. For many, January is seen as a new beginning offering a clean slate. Why not use it to help employees develop healthy saving tactics as part of their new year's resolution? Consider introducing financial education sessions early in the year that address ways to pay down debt while explaining how it is possible to also participate in the company's pension and savings plans.
Seek feedback about your benefits program
As workforce demographics shift from being heavily weighted with Baby Boomers to the now burgeoning influx of Millennials and Generation Z (those born after 1995), consider soliciting feedback from these cohorts.
- What is it that they really value from a benefits program?
- Are they worried about how long it will take them to pay off student loan
- Are they even remotely interested in saving for retirement or does that seem like so far off in the future that it isn't even on their radar?
- What do they know about the current programs?
Surveys show that when employees are stressed about their finances, they are more distracted at work, take more time off to deal with their financial concerns, and are absent more because of stress-related issues.
Don't assume employees know the details of what is offered in the benefits and pension or savings plans. For example, employee assistance programs that offer financial counselling might come in quite handy as the bills roll in, but how many employees know that this service exists?
Prevention is key. Provide financial education even if the need for it isn't discussed openly around the water cooler. Talking about money woes may be considered rude or even a social taboo. In fact, a survey by Fidelity reported that 43 per cent of respondents didn't know how much their spouse earned and 36 per cent weren't aware of the amount they had invested.
Employees may prove to be more willing to share their interest in financial education via an anonymous survey than they would discussing it directly with their manager or in a team setting. Look for ways to share what's available to them through their pension and savings plans as well as other free community resources. There is no downside to making available information that reduces stress and allows employees the ability to more fully focus their attention on giving their best at work.
For more ways to promote financial literacy, pension and savings communications, we invite you to contact us. We're here to help so that you can focus on what you do best.
What stopped the gold watch?
There was a time when a gold watch was the epic standard for long service recognition. Technological advancements have changed what makes us tick when it comes to long service incentives. In recent years, traditional time pieces like a watch have been replaced by smart phones, tablets, and 3D televisions and printers.
No longer is the North American employer able to boast of growing numbers of new entrants into their “quarter century club” and that’s likely because employees achieving a milestone of 25 year tenure seems virtually unheard of these days. According to a report by Thinkopolis, job hopping has become the new norm with only 30 per cent of employees staying with one organization for over four years. This same report entitled, Time to Work, noted that 51 per cent of people last only 2 years with one employer.
So what do these stats mean for employers?
Job hopping costs money. When retention rates drop, the cost to the bottom line is felt in tangible and significant customer-facing ways. A lack of connection to one’s job, manager and company manifests as an unsettled culture of disengaged workers who become easily swayed by the potential of greener employer pastures.
Based on a plummeting tenure trend, it won't be uncommon for employees to have held between 15 and 20 jobs during the course of their entire work history. We know there was a time when potential employers frowned upon applicants with resumes revealing job-hopping tendencies, but with it becoming so commonplace, employers have needed to embrace this paradigm shift. They recognize that tenure won't ever look like it did back in the 70s when employees retired from one employer after 35 - 40 years of service.
With retention challenges there is some level of irony as many employers face the dilemma of dealing with two juxtaposed agendas in the workplace. Employers simultaneously hope that some of their long standing employees don't linger longer than they are seen as able to add significant value while at the same time they wish their younger talent would stay put long enough to make a tangible contribution to the organization.
Here are 3 retention tips to consider:
1) Create a clear development and/or advancement path. Younger generations in the workplace look for transparent ways to advance. If employees believe they need to "pay their dues" or "bide their time" like the generations before them, you've probably just given them enough motivation to leave. Show them instead that they are worth the investment and that even if there isn't a short advancement ladder, there is a influential lattice that offers them career development opportunities through stretch assignments, job shadowing and mentorship.
2) Check in and check-up on your benefits program. An annual assessment of your benefits and pension plan is a helpful way to stay connected with the generations in your workforce. Plan design can be tailored to meet specific goals. The right type of program supports an employer's retention strategy and should align with organization's key objectives. For example, many younger workers remain weighed down by worries about paying off student debt. The introduction of financial literacy education or financial coaching might create enough sticking power to douse the inducement to look elsewhere.
3) It isn't all about the money -- be flexible. A report by Future Workplace noted that flexible hours and telework policies are more important to younger workers than salary.
We know that not every employer has the ability to offer flexible work from home arrangements, but savvy employers recognize that it pays off to trust their employees to adjust their schedules when the situation calls for it.
Give your employees reasons to stick around.
Quelling the tide of job hopping tendencies isn’t without its challenges, but keeping employees focused, productive and engaged is worth all the time and attention an employer can give it. Communicating company values and acting on feedback creates a stronger connection when employees feel they have the chance to contribute and that their ideas have been heard. To explore this topic in greater detail along with additional ways to ensure your benefits program supports your retention efforts, we invite you to contact us. 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.