“The secret of change is to focus all of your energy not on fighting the old but on building the new.” Socrates
Over the past few years, a record number of employees have decided to change careers with some still contemplating a move to greener pastures. By better understanding employees’ needs, businesses can capitalize on top talent seeking new opportunities. For Canadian small business owners experiencing difficulty finding the resources to hire employees, offering value through supplementary health benefits and perks may be a solution.
To put it bluntly, business has been volatile if not slow. Last year saw an increase in insolvencies (41% compared to 2022) the largest in more than 30 years. According to a recent Stats Canada report on small businesses this has left enterprises with a decrease in profitability, more issues concerning costs, less optimism for the future and difficulty hiring new employees.
All of this has created added pressure for new businesses which normally have slim profit margins in their early years. Becoming established and finding its footing is often one of a business’s most important objectives in its nascent years. Providing supplementary benefits and perks on top of a cost efficient benefits plan can help a business not just survive, but retain talent and attract employees. Responding to the changes employees’ value in their workplace has been challenging since the pandemic. This can be seen in countless industry reports documenting the societal change in attitudes from employers’ and employees’ perspectives towards employment.
- According to a 2022 ADP Canada survey on workforce sentiment data, though 79 % of small businesses that reduced staff due to the pandemic were able to rehire employees, 33 % reported difficulty finding workers and 46 % indicated an increase in talent shortage because of the pandemic. Employees looking for better career opportunities continue to be an issue as is seen with the Great Resignation that some would argue continued into 2023.
- A 2023 Mercer Canada turnover survey noted the average voluntary turnover rate in Canada has increased to 15.5% in 2023 which is up from last year’s result of 12.4%. Possible reasons could be employees wanting more flexibility in their workplace setting or feeling dissatisfied with their existing employer.
- Furthermore as PWC 2023 hopes and fears reported, an increased workload and rising cost of living has pushed workers to look for better pay – 23% of Canadian employees are expected to search for new job opportunities in the next year which was up from 16% the year prior.
While employers globally acknowledged the need to focus on employee wellbeing, Canadian businesses were behind in finding the same success in combating talent scarcity. According to a Talent Trends 2022 survey by Randstad Sourceright, 82 % of global employers reported that when they highlighted employee well-being it helped them fight employee turnover compared to just 67 % of Canadian employers. On top of that only 40% of Canadian businesses have created additional avenues for workers to share their thoughts and opinions on company guidelines and processes. This has resulted in a barrier towards establishing better employment practises for staff. The report which surveyed over 900 human resources and C-Level leaders which spanned 18 countries also found the following; 84% of the leaders that were polled said they’re more focused on talent experience than ever before, 74% believe that putting personal well-being first is important to job applicants when it comes to culture and 62% are also investing in workplace culture, employee feedback and engagement systems to better gauge employee sentiments and understand their needs. The changing workplace and employee sentiment was noticed even earlier amongst numerous industry leaders.
Back in a 2021 Julie Potvin, senior principal consultant at Mercer Canada said in a Benefits Canada article that for many employees who started working remotely, they had the opportunity to reassess their working conditions and examine how their employers were responding to the change. She said prospective employees were broadening their view of total rewards by looking for benefits that supported their work-life balance and mental health. This can be seen in Mercer’s most recent Inside the Employee’s Minds Report. In 2021 employees’ top needs were physical health/fitness, work load/life balance and mental/emotional health. Although financial concerns regarding debt and expenses have moved to the forefront in the most recent study due to inflation, workload/life balance still remains a top 3 concern for employees in every age demographic in 2024.
The claims trends from the onset of the pandemic shows us the growing importance of mental health care coverage by employers. In fact, mental health claims by Canadians have increased by 132 % since the coronavirus pandemic began, as can be seen in a report by Green Shield, which compiled data from the insurer’s claims database between 2020 to 2023.
Canadian employers have responded by investing in innovative financial, physical and mental health benefits to drive their attraction and retention efforts, according to the 2023 Mercer Innovative Benefits survey which polled more than 300 employers. Respondents said they’ve invested in education on eliminating workplace stigma and raising awareness of self-care (64 %), virtual therapy (57 %), mental-health training for managers (49 %) and online assessments and resiliency training (48 %).
This reaction from employers could potentially be responsible for the positive feedback from employees. While the number of active businesses dropped in 2023 on a monthly basis, the monthly average was greater than in previous years, indicating positive growth as was found in Stats Canada’s December 2023 small business report. International HR consulting firm, Robert Half surveyed 1,094 hiring managers in numerous industries at firms with 20 or more employees in Canada. The report showed that 54 % of hiring managers planned to add new permanent positions in Q1 and 2 of 2024. Moreover, they noted that an additional 40 percent were expected to hire for available positions. As previously noted, employees are looking for that extra incentive to join a company.
“To remain competitive in an ever-evolving employment landscape, small businesses must deliver value to retain team members,” said Tim Bishop, the managing director of Blue Cross Canada in the 2023 Blue Cross Canada Small Business Study. “More than half of employees feel underappreciated in the workplace and nearly one-quarter are actively searching for other job opportunities. Providing benefits can help mitigate quiet quitting and keep employees satisfied and engaged at work.”
The feeling of employee discontent can be seen during the pandemic when in the third quarter of 2021 Stats Canada reported a 60 per cent increase in job vacancies compared to pre-pandemic levels. The Great Resignation is symbolic of the change in people’s social values. Many people have shifted away from the idea of working extensive hours stuck in a cubicle trying to move up in status and pay rapidly while ignoring other meaningful aspects of everyday life. Some have described this lifestyle amongst the younger generation as “hustle culture” or “rise and grind” which has been documented by numerous publications (CBC, BBC, CTV, Financial Post, Canadian Business). One theory is that it was a partial catalyst during the pandemic with influencing how employees have changed their views towards what they value at their jobs. There was also an increase in employees who retired as well with younger employees filling these roles. When you combine these two occurrences you end up with both management and staff who have been taking a more holistic approach to how we value work and what actually is and isn’t important to employees aside from pay.
A Benefits Canada article in 2021 discussed the change that was taking place concerning the approach employers should make to attract workers. To compete with larger organizations in recruiting talent, small- to mid-sized employers should be crystal clear about who they are and how their total compensation package aligns with that, said Kim Siddall, vice-president of enterprise consulting for the west at People Corporation. For instance, a business with a reputation for being a leader in positive change should replicate that with its benefits. “People are making decisions about prospective employers with their hearts and are looking for companies with values that align with their own. Companies don’t have to compete on wage or pay. They can tell a greater story about how they look after employees through their benefits, work-life balance and community or social action opportunities.”
Specific examples of these benefits being offered which paint a clearer picture of the evolution in workplace welfare are the growing popularity with inclusive benefits. This is an emerging area of investment for employers. Services such as fertility benefits, gender affirmation benefits, adoption and surrogacy allocations, child, eldercare programs or applications. Work perks can also go a long way in showing employees that businesses are responding to their needs, especially when you consider how much was lost during the pandemic. Robin Powered Inc, a workplace management platform surveyed 600 full time employees where 23% of respondents reported their work perks were lost during the pandemic. The most common perks were employers offered were social gatherings (31 %), work from home days (30 %) and free food and snacks in the office (28 %). Other perks were free food (25 %), health and fitness reimbursement (20 %) and travel reimbursement (17 %). Work perks and ancillary benefits were nice little add-ons that employees appreciated especially as the cost of living continue to rise.
“As inflation and affordability concerns remain top of mind, Canadians are seeking stability and security,” said Tim Bishop. “Offering health benefits can foster a healthier, more engaged workforce and provide employees with the reassurance that their health and the health of their loved ones covered. We are proud to offer a range of plans to meet the unique needs of small businesses across the country, to provide comprehensive coverage and service without compromising budget.” Blue Cross wasn’t the only provider to take notice of these growing demands and need for change in benefit offerings to employees by small business owners.
An Empire Life industry outlook advisor webinar further cemented these same sentiments. The industry trends panel discussion was held in concert with CLHIA (Canadian Life Health Insurance Association). They found that emphasis on costs, mental health and employee well-being were the main concerns. In a live poll of more than 600 advisors, 56% ranked balancing costs and enhancements to their benefits plans as the top priority—an increase of 10% over last year. 36% ranked cost containment as the top priority—a 17% increase compared to January 2023.
According to CLHIA’s Life and Health insurance fact sheet for 2023, insurance providers offered coverage for over 29 million Canadians, or 74% of the population, paid out $114 billion in claims: $2 billion a week, an increase of 10% over 2019, paid $650 million for mental health supports, up 10% from 2021 and nearly double the amount paid in 2019.
Other trends insurance providers found were the following;
- Sunlife year in review; attracting and retaining talent is a top priority, cost pressure remain front and centre, mental health claims continue to rise, women’s health needs are not being met, We need to focus on prevention, early intervention and access to care
- Blue Cross Small Business Benefits Study; a majority of employees would rather have benefits than a significant raise, $1800 is the average cost per employee at 50% premium, ROI by offering benefits include; employee morale and loyalty 35%, To retain employees 32%, to maintain workplace productivity 32%, better workplace culture 29%, to attract employees 29%.
- Desjardins employee wellness study; 3 out of 4 people rate their wellness as good (a score of at least 7 out of 10), but less than 1 in 4 rate it as very good (a score of 9 or 10 out of 10). The biggest impact on overall wellness is physical, mental and financial health yet Canadians believe that the environmental and social aspects must also be considered.
- Manulife claims trends; – 48 days lost per employee each year due to health-related absenteeism/presenteeism, 40 % of people aren’t doing the recommended amount of physical activity, 46 % are experiencing at least one work-related mental health risk factor, average mental health service coverage is $750.00 which would likely only cover between 3 to 5 sessions of therapy, Most people need between 8 to 20 sessions per year to get satisfactory treatment for a diagnosis of depression and/or anxiety. For this number of visits, employees require between $2,000.00 – $4,000.00 of coverage per year, $18,000 is the average cost for Short-term disability leaves for mental illness.
The world we live and work in has changed. Many ideas and work procedures have either become obsolete or antiquated and do not reflect the evolving needs of today’s workforce. A more clear and open dialogue within organizations reflecting the need to address employees’ health well-being has been a beacon of hope. The importance of protecting employees and their families’ health needs by providing proper coverage has never been more important. This however is still an on-going process. Employers have the opportunity to build towards a new future that better corresponds to their staffs’ needs like flexibility and transparency while working towards achieving their companies’ goals. The statistics have shown that consistent investment in mitigating workplace stressors and open dialogue concerning aligning employees needs with the businesses goals can help contribute to that businesses success.
Ultimately a business owner’s ability to be proactive in addressing their employees’ needs whether it be physical, mental, emotional or financial, will help their staff provide for their families. By creating a healthier environment for the workforce this will put the organization in a better position to grow and succeed. Whether businesses adapt or fall behind, only time will tell. What we do know is that the only thing that is ever constant is change.
Resources
2023 Canadian Turnover Trends | Mercer (imercer.com)
https://www.pwc.com/ca/en/media/release/hopes-and-fears-2023.html
Innovative Benefits Survey 2023 (mercer.com)
Health Benefits Might be Worth More than Money | Blue Cross of Canada
COVID-19 in Canada: A Two-year Update on Social and Economic Impacts (statcan.gc.ca)
‘Great Resignation’ or just greater expectations? | CBC Radio
‘Quiet quitting’ isn’t really quitting, but it is forcing employers to adapt | CBC News
https://www.bbc.com/worklife/article/20230417-hustle-culture-is-this-the-end-of-rise-and-grind
https://canadianbusiness.com/ideas/loud-quitting-trend-lazy-girl-jobs/
https://www.cbc.ca/news/business/canada-jobs-retirement-economy-1.6580000
https://financialpost.com/fp-work/canadas-aging-work-force-national-labour-shortage
https://robinpowered.com/blog/employee-perks-in-a-hybrid-workplace
2024 employee benefit plans: focus on costs, mental health, well-being | Empire Life
Small Business Study 2023 | Blue Cross of Canada
2023-Blue-Cross-Small-Business-Benefits-Study-Report.pdf (bluecross.ca)
https://www.desjardins.com/on/en/news/wellness-survey-5-dimensions.html
