For employers, the past few years have been full of changes in the workplace and in the workforce. The pandemic shone a spotlight on the mental and physical health of employees, whether they were working remotely or not. Now as we are in the post- pandemic mode, people who held off on visiting doctors, dentists or specialists are now trying to catch up on their health and wellness.
Meanwhile, employers face rising costs and interest rates at the same time as there are labour shortages. Employers know that to fill jobs, they have to remain competitive with benefits, even as the costs of benefits and the expectations of employees are both on the rise.
Are there any surprises ahead for employers in 2023?
Benefits Costs Continue to Rise
From a 2022 employee survey data, 80% of employees believe their employee benefits plan does not provide adequate mental health coverage. Because of the pandemic, employees now place their mental health needs as a higher priority than meeting work demands. The prices for some pharmaceuticals have been rising, as have costs for dental care and paramedical services. For employees who are delaying their retirement due to inflation worries, they will increase their employers’ health benefits costs and also cause funding increases to retirement plans. Clearly cutting benefits is not an option for employers in the current labour climate.
Where have all the workers gone?
Canada’s labour market has experienced a lot of shifts in the past three years. Worker shortage will persist in 2023. Many workers are transitioning to other industries and sectors. Notably, there is a major shortage of workers in hotels, restaurants, and grocery stores. In some sectors, wages have not kept up with inflation. Thirty-one per cent of Canadian workers were contemplating a job change in 2022.
Employees are shifting in greater numbers to professional, scientific, and technical services, public administration, finance, insurance, real estate, rental, and leasing jobs. They are moving away from transportation and warehousing, forestry, fishing, mining and the oil and gas sectors. Since the pandemic, wages have increased by 25% in the information and cultural industries, and by 16% in real estate, rental, and leasing, yet they only increased by 0.6% in mining and oil and gas sectors.
In the environment where costs are rising for benefits due to inflation, expanded offerings and delayed worker retirements, employers need to find ways to manage other costs without cutting back on benefits. Attracting employees with benefits is now a crucial and competitive reality. Approximately 70% of younger Canadians in the workforce indicated they would leave their employer if they found improved benefits at another company.
Personalization is the key
What can help benefits plan managers navigate the rising costs of benefits, the labour shortages, and the need to attract and retain workers? Personalization of plans.
What benefits will best support health and wellbeing — physical, emotional, financial and career — for each employee?
To meet the higher expectations of employees regarding their benefits, organizations and their HR departments can do more to use data analytics and to create employee personas to determine what individual employees want from their benefits. With five generations in many workplaces, their needs vary dramatically, from childcare to eldercare, financial assistance for debt reduction, or an updated retirement plan.
Now here is a surprise!
Between 2022 and 2025, the Canadian government is expecting to add more than 1.3 million permanent residents, which includes an estimated 243,000 highly skilled immigrants. Almost half of those highly skilled workers are expected to immigrate to Canada in 2024. They will change the workplace and prompt employers to ensure that their Diversity, Equity and Inclusion policies are up to date, and that their benefits plans can be personalized to support employees adapting to Canadian life.
It is NO Surprise, that at Health Risk Services, we help managers of benefits plans make strategic decisions to craft cost-effective personalized plans that attract, retain, and reward employees.
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