Employee benefits in Canada can range dramatically based on your organization's structure and employee needs. Companies all over Canada are always trying to find the right balance between providing employees and their families the assistance they need while not paying for unused or unnecessary benefits.
Benefits are the main way companies support employees and their families so they can live their lives to the fullest and be the most productive they can be.
This guide was created to help HR professionals and business leaders learn how to design and invest in effective benefits programs and add value to compensation packages. Here we have gathered the most up-to-date information on modern benefit programs, how benefits have shifted with the changing workplace landscape, how to design and implement a successful benefits plan, and how your organization can use benefits to stand out among your competition.
Employee benefits programs can range from health and medical care to travel benefits, company cars to gym memberships, and everything in between. It’s no wonder that many businesses find it difficult to design a benefits plan that meets all the unique needs of their employees and what’s best for their organization.
As workplaces have evolved and technology has expanded, flexibility and customization of employee benefits programs has become more important employees have begun to expect more from their benefits plans. There are also federal, provincial, and territorial regulations that are constantly in flux and need to be kept in mind when creating a new plan. First lets go through what benefits are commonly legislated and what is up to you to consider providing as an employer.
There is a lot to keep track of in terms of employee standards legislation and CRA tax rules that need to be considered for every employee in your organization. Making sure you understand what is required by law is crucial to making sure you don't make decisions that end up costing your business in the long run.
The following are legislated employee benefits that employers are required to provide to their full-time employees. These benefits may not apply to part time, contractors, or freelance employees. These benefits are generally directly added to or subtracted from an employee’s pay.
Outside of these legislated benefits, employers can decide what additional employee benefits they would like to provide to add additional value to their employees. Next, let's look at what benefits are taxable.
The rules around taxable benefits in Canada are constantly changing so it is important to stay up to date to prevent costly mistakes.
A taxable benefit is anything provided to an employee that has a monetary value and where the employee is the main beneficiary.
As an employer it is your responsibility to:
So, what types of benefits are taxable vs. non-taxable? Here is a list of the most typical taxable and non-taxable benefits:
Over the last decade there has been a significant increase in the amount and range of benefits offered by employers. In order to stay competitive and attract and retain top talent, organizations are building benefits programs that are more flexible and comprehensive than ever before.
If you are designing a new plan or updating your current one, here a list of the most commonly offered employee benefits you should be considering:
Health and Medical Insurance
In addition to insurance provided by the government, organizations can offer additional private health insurance to help employees pay for:
Employee Assistance Programs
Employers can choose to offer assistance programs for employees who are having personal or work-related issues to help promote well-being in a professional and confidential manner. This assistance may include:
In addition to health and medical insurance wellness benefits may include benefits like:
Additional vacation or personal day allotment
Short-term disability insurance
Long-term disability insurance
Group RRSP or pension plans - In addition to government provided CPP or QPP programs
Education and training programs or reimbursement
Flexible work arrangements
Profit sharing programs
Choosing what types of benefits your organization offers has a lot to do with employee demographics and the size and structure of the company. When designing a new benefits plan it's important to get feedback from your employees and business leaders to help inform your decisions and learn what benefits are of most value to those in your organization.
Many organizations have had the same benefits offerings for years and are unaware of how the employee benefits landscape has changed. In our next chapter we’ll look at how new technology, changing workplace structure, and increased focus on things like mental health and work/life balance have altered how employees view benefits.
Over the last decade there has been a massive shift in the traditional workplace. We have organizations employing workers from many different generations all who have unique motivations and expectations of what they get out of their employment and career.
With the introduction and popularity of new technology, virtual tools, and more flexible work styles many industries are changing how their workplaces operate.
A company’s benefits plan needs to mirror these changes and aim to provide value to all employees, whether they are nearing retirement or starting their career, and support workers and their families so they are able to live and work in harmony. Designing a benefits plan that meets all these needs can be difficult, so it's important to understand how the modern workplace has changed in order to provide the most compensation value possible to all your employees.
Today, up to four different generations may be occupying a workplace at the same time. If you were to survey your employees about what benefits are most important to them, you are going to get a large range of answers. A newer employee right out of school may put more emphasis on flexible work options, while a tenured employee may want increased retirement planning or additional insurance. These different perspectives can make it extremely difficult to design a one-size-fits-all benefits program.
In a recent study by Harvard Business Review, they determined that when employees do not feel they are properly represented in an organization's policies and practices their motivation, performance, and overall satisfaction at work can decline. This is one example of why it is so crucial for HR leaders to not make assumptions and aim to truly understand the needs of their entire workforce.
Business leaders should take into consideration:
As you can see, the demographics of your workplace can have a massive impact on the type of benefits plan, communication, and management structure you offer at your organization.
Different generations have different expectations and the way each one approaches their career and work/life balance needs to be addressed in order to attain and retain top talent.
While it is important to recognize the generational makeup of your business, it is not advisable to base important policy details based on age alone. We’ve all heard the stereotypes that Boomers fear technology or Millennials are lazy. Even within age groups there is a huge variety of factors that go into why someone may prioritize some benefits over others or why they are more or less committed to a company.
Every workplace ecosystem is unique, and HR leaders need to find the nuances within this ecosystem to build policies that fit. Here are some key guidelines to managing a workplace with many different generations.
Traditional benefits plans with limited flexibility and transparency are becoming a thing of the past. Additionally, many organizations are realizing that it's not just typical benefits that influence employee productivity and satisfaction in the workplace. Things like flexible work schedules, different management styles, and workplace technology, all are considerations a potential employee considers before choosing to take a job.
In order to continue to attract new talent and retain key employees organizations need to adapt and continue to grow to build a workplace and corporate culture that meets employees needs therefore supporting employee productivity.
In the workplace, flexibility can mean many things. Many employers consider the emphasis on workplace flexibility to mean in work schedules or working from home but it is more the desire from employees to have more control over their workday. For some organizations attendance and work shifts are rigid for a reason but where possible all workplaces can add some amount of flexibility:
In decades past the line between work and home were very clear, today that line has all but vanished. Maintaining work/life balance can be extremely hard for some people and the greater an employees responsibilities at work, the more likely they are to let work bleed into their home life. As a HR leader or employer it is your job to recognize that some employees will need help and even permission to turn off their work brain and focus on themselves - and making their own hours or working from home is not a silver bullet for better balance.
Some ways you can help employees with their work/life balance and mental health:
Going hand-in-hand with promoting strong work/life balance and mental health is the recent workplace focus on wellness. Physical health programs and mental well being services are some of the ways employers are helping to expand their benefits offerings to better support employees and their families.
Many younger employees are looking for these kinds of benefits when choosing somewhere to work and many consider these programs as a way employers display how much they care about their staff. With today’s technology many of these programs are digital, offered at a low cost, and self-directed by employees themselves. Some common wellness programs and personal growth services include:
Together with offering more flexibility for employees tends to be the addition of new HR and benefits technology and communication tools.
HRIS technology has grown to be one of the main hubs for employee engagement and productivity tracking and can help HR leaders and managers get a clearer picture of workplace trends.
The huge rise in working from home due to the Coronavirus pandemic included a spike in the need of technology expertise of HR professionals. While many in HR may have experience dealing with technology for benefits administration or record keeping, HRIS systems today can combine many aspects of HR into one system and allow for employee access to help manage their side of the equation.
Additionally, new communication tools and the policies on data security, cloud access, and privacy are more likely to now fall within the HR realm instead of IT. The addition of strong technology and tools that empower employees and make communication and benefits administration easier are becoming more and more vital to workplace culture and overall job satisfaction. If you haven't considered adding or upgrading your technology recently here are some areas where advanced technology has helped companies stay ahead:
Now that you know some of the main ways organizations are updating their workplaces and benefit plans to address changing demographics and new employee expectations, next we dive into some strategies you can use to design your ideal benefits program.
All organizations are unique and a benefits plan should take into considering the needs of your workforce. Cookie-cutter programs may have been typical years ago when benefits options were limited, but things have changed. Today, designing a benefits plan that is competitive in your industry can be a true value add to any organization as a recruiting tool and retention solution.
The design and implementation of your benefits plan is one the key ways HR leaders can ensure a successful roll-out of benefits and ensure that employees are aware and taking advantage of their full compensation packages. To get the most out of any benefits plan reevaluation or new plan creation make sure to follow these key steps:
Before you go ahead choosing program options and what benefits you want to offer, first you should know what’s important to those who will be using the plan - your employees.
To find out what matters most to your staff, conduct a full needs analysis to discover what benefits matter most and where your employees would see the most value, the answers might surprise you! Some organizations conduct this analysis using anonymous surveys or confidential personal interviews. If a plan is currently in place look at historical data to find out what benefits were most used and where costs were outweighing employee usage.
While doing your needs analysis consider the different demographics or trends in your workforce. Are the majority of your employees just entering their careers? Do they tend to have families or other dependents? Do employees tend to live close to the office or commute? These types of questions can help to get an idea of what types of benefits might be the most beneficial to your employees.
Another aspect to consider when designing your benefits plan is what is typical in your industry and what your competitors are offering. For many organizations, compensation and benefits programs are a way to retain and attract employees so if your policies aren’t competitive you may be losing out on top talent.
Also, consider the typical workday of your employees in your industry. What benefits would address conditions that are common in a workday of someone in your industry. Do employees tend to work overtime hours? Can their work be done away from the office? Is there an emphasis on bonuses in your industry?
Now that you have a general idea of the type of benefits that are most important to your employees, and what will stand out among competitors in your industry, now you can begin constructing your ideal program. Using this analysis you will be able to tell what benefit areas are of most importance to your employees such as retirement savings, health and medical services, wellness programs, or career planning. Prioritizing the overarching goals of your benefits plan can help you budget for and select programs aspects that will provide the most value.
If you have an existing plan you should have some data to inform on any unnecessary costs and how much ROI you are getting per employee. Use as much current program information as possible to determine a future benefits budget.
Whether you are building a net new plan or are conducting a reevaluation of your program you may want to consider a few carriers or see what other programs are out there. This process doesn’t need to be difficult and you shouldn’t feel handcuffed to sticking with your current carrier if the program isn't working or costs are increasing.
Working with a benefits advisor or brokerage firm can help you determine what you might be missing out on and get you a range of quotes to help you figure out your budgeting options and potential costs. Advisors have access to HRIS technology that connects to many insurance carriers which provides a multitude of benefits including:
Outside of benefits that employers are required to provide by Canadian law, there is a huge range of benefit options available. Not only can you pick and choose the types of additional benefits you are offering, you can also choose how flexible your program will be and how much control an employee will have over the makeup of their policy.
In Chapter 1 we listed the most common types of benefits offered by many Canadian employers. For many HR leaders this process is the most overwhelming with many options to choose from and the potential for a significant evaluation and quoting process. For you to best understand all your group benefits plan options and what features would be most valuable to your business we recommend partnering with an experienced benefits advisor.
When you work with an advisor you are bringing in an expert; someone who can gather quotes from multiple benefits companies, look into the details of your previous claim history, and recommend the best path forward. This stage is a critical point in developing or updating your benefits program and you don’t need to feel overwhelmed when there are people ready to help.
Look to partner with an advisor who has access to multiple carriers so they can look at all options and are not limited to only quoting preferred vendors. The more flexibility your advisor has in carrier options, the better they will be able to find the perfect fit for your business. Working with a partner during this process can also save you time in the long run, if you ever decide to switch programs or carriers you have someone who can handle all administrative changes and updates on your behalf.
Even if you have decided on the types of benefits you would like to offer, it can’t hurt to review them with an expert. Fill out our simple benefits checklist so you can be sure you’re getting the best valuable for your business.
Now that you’ve designed a plan that best fits your organization and its employees, it’s time to implement your program and begin using it! The easier it is for your employees to get benefits information and engage with the plan, the higher the rate of implementation success so make sure you have a plan.
Give your employees lots of notice that you will be launching a new or revised plan and that there is going to be upcoming information sessions and enrollment communications. The more advanced notice you can give employees, the more ready they will be for any changes and prepared to ask any questions they may have about their plan.
Let employees know if there will be any new technology or tools involved in the program roll out and whether any training will be done in house or with representatives from various vendors. The more information you provide the more prepared employees will feel. Create a timeline that is readily available to all staff and update it regularly with any changes.
This can be the trickiest part of any program implementation. Depending on the size of your company, enrollment may include one-on-one meetings or group presentations. Larger organizations may need to split their staff to conduct small group sessions or provide sessions virtually.
Using HRIS technology can drastically improve the onboarding experience for both existing and new employees and help with digitizing documents and creating a simple and automated process for benefits enrollment. Do not underestimate the value of having all your benefits information, documents, and communication in one easy to access portal.
If you have introduced new HRIS technology, benefits administration tools, or other applications included in your benefits plan make sure all employees are properly trained on these systems. In many cases this training can be conducted by the vendor themselves and the sooner the training the sooner employees will feel comfortable using the new program.
As previously discussed, having some kind of main benefits communication forum whether through an HRIS or another tool is invaluable to the success of your program. This single source of data for all benefits details makes it easy for both HR leaders and employees to access benefits documentation and information. Make sure to include these aspects within your communication platform:
Congratulations! You’re ready to get your new benefits program off the ground and start enrolling your employees. To ensure the continued success of your program make sure to conduct periodic review and evaluations of your overall program and get feedback from your employees on a continuous basis.
Compensation no longer just consists of an employee's salary. Businesses with an eye for growth and development have now shifted to rightly take into consideration a total compensation model. Total compensation is a more complete and nuanced account of the rewards each individual employee enjoys as part of their compensation package, which may include personal days, health plans, benefits, bonuses, leaves of absence, wellness programs, and more.
While it may seem like some of the aspects of a complete compensation plan are small perks or intangible in terms of employee productivity, this could not be further from the truth.
Thinking about your organization's overall compensation program as more than just salary or a basic benefits plan will give you a true competitive advantage and increase employee satisfaction.
Employers should consider the following organizational benefits of a total compensation plan:
For the first time in years there are more positions available than there are qualified candidates to fill them. One of the surefire methods for landing top talent is to improve your employment package. Salary is important, but you need to think about total compensation. What else do your employees get beyond a paycheque every week?
By offering employee benefits, you can increase the value of your total compensation and pay employees more without the expense of raising salaries. Higher total compensation makes your company more attractive to top employees.
Disengaged employees or presenteeism was shown to cost employers up to 7.5 times more than absenteeism, or between 15-25 billion dollars per year in Canada. One way to combat this and boost employee engagement and productivity is to support them through their benefits plan.
By adding wellness programs to employee benefits employers can add to their bottom line. A recent study showed that 61% of employees surveyed had made healthier lifestyle choices because their workplace promoted wellness programs. This impacted overall job satisfaction and productivity which would therefore impact the overall profitability of any organization.
Investing in employee wellness is known to lead to reduced absenteeism, less paid sick days, and an overall increase in productivity. The costs of disengaged workers or mental-health related absenteeism is much higher than the average cost of providing services to combat these issues.
The costs for providing reasonable mental health-related accommodations are often fairly low, with most costs well under $500 per person per year. Also workers tend to value employers who support their wellness, 89% of workers who have wellness initiatives at their job would recommend their company as a good place to work.
Workplace flexibility and time off ar two main ways your compensation plan can help support employees work-life balance. Almost half of employees surveyed in a recent study placed high value on the ability to work flexibly.
Employees are also becoming more transparent about their responsibilities and needs outside of work and asking for time off for personal appointments and family demands. Companies that support and encourage employees to have a healthy work-life balance tend to get improved productivity and job engagement in return.
Adding a focus on health and wellness to your corporate culture can help change the entire feel of your workplace and help prioritize employees and their needs over strict corporate traditions of the past.
While culture cannot be quantified, by investing in your overall work environment and adding fun wellness activities and employee appreciation events you can help improve culture and put the focus on the most important part of your business, your people.
Many organizations include training, career planning, and skill building in their compensation plans. This kind of investment in the personal and professional growth of your employees will be recognized and help many younger employees feel like they are building their career with the support of their employer.
Consider offering reimbursement for additional training or professional courses, conduct a paid company-wide education day where employees can gain new certifications or skills, or have company outings to volunteer.
Most employers expect a certain amount of dedication and loyalty from their employees but typically most employees reciprocate the respect and investment their company gives them. Most employees will use compensation to judge whether they’re being treated fairly. If they believe the company values their work and compensates them well, they’re more likely to stay with you.
Employers are also tasked with keeping costs in check. Not every employee can earn a six-figure salary, even if some people may be worth their weight in gold. Once you’ve secured the best person for the role, you want to keep them long term. Offering comprehensive compensation is one way to let your employees you’re invested in their career and success both personally and professionally.
Total compensation is only a game-changer if your employees recognize the value you are providing. How can you show your employees how much their compensation is worth? It’s much easier than you might think. You don’t need to pull out your calculator and start adding up employees’ various rewards. With a human resource information system (HRIS), you can quickly create individualized total rewards statements for your employees. These statements show employees a breakdown of all the types of compensation they’re receiving, as well as a dollar value for each.
Investing in HR and benefits technology can also give you a wealth of data on how to best structure compensation for the future. HRIS technology can help track employee engagement and productivity and show you exactly how valuable your compensation package is to overall company goals.
A company is only as strong as its employees, and by investing in total compensation you are providing your staff with the tools they need to perform at their best. Read our whitepaper below to learn more about how successful compensation management can improve overall business growth.