Flexible Benefit Plans – do they increase employee engagement?
By K. Cantwell, Montridge Advisory Group Ltd.
In 1909, Henry Ford famously said in a sales meeting that a customer can have any colour of Model T he wants…as long as it’s black.
There’s a backstory to this statement. Ford designed the Model T as a car for the masses – and 95% of customers who bought one in the first year bought the car as-is. However, Ford’s sales team kept requesting variations that catered to the 5%, when the Model T production line simply was not equipped to be more successful with more differentiations.
Nowadays, there are ludicrous options for customizing your ride, and the concept of Ford’s “as long as it’s black” makes us giggle.
For decades, group benefit plans have been the equivalent of the first-generation Model T. Innovation was slow, reactionary in nature, and for the most part all plans covered the same thing.
Consequently, many employers haven’t given much thought on innovating their benefits program. They don’t know the options out there; may think they’re too small to offer choice; or don’t want to make changes under a “it’s not broken” mindset.
In the minds of your employees, however, Choice is King – and benefits are a valued form of their compensation package. In fact, the 2020 Sanofi Canada Healthcare Survey gives us the following facts:
- 86% of plan members say the benefits plan is an important factor when deciding on a job offer; and
- 71% of plan members say their benefits plan is an important incentive in keeping them with their current employer.
Many employers look at large corporate “flex” or “cafeteria” style plans and assume that if they’re not of the same size, they can’t compete. This couldn’t be further from the truth. Building flexibility into a benefits plan can be as simple as:
- Analyzing the spending habits of your core policy, and adding a Health or Wellness Spending Account, allowing employees to use their funds for eligible expenses that are relevant to them and their family members. In fact, the Sanofi survey confirms that 93% of employees with these accounts value them – and 82% of employees who don’t have them, wished they did.
- Offer the opportunity to purchase Optional Life Insurance and Critical Illness coverage through your core plan. Employees pay 100% of these premiums – making the offering a no-cost enhancement for you – but gives the employee another reason to stay if being courted elsewhere.
- Adding wellness components or new technologies to your policy, which are inexpensive in nature. For example, offering virtual physician care provides your employees with choice on how to maximize their personal time. Can they see a doctor after dinner from the comfort of their home? Without it, will they need to take time from work & pull the kids from school to wait in a walk-in clinic?
Another valued benefit is Employee Assistance Plans (EAPs), which provide resources and counselling for a myriad of issues. EAPs can provide additional coverage for counselling that may not be available within the core plan, or where the employee has already maxed out this coverage. They can also help with financial education to help reduce money worries.
Multiple studies have shown that employees who have Wellness components to their employment are happier, have less stress, are more productive, and are less inclined to look elsewhere.
Employees are an appreciating asset – the longer the relationship, typically the more valuable they become. Both the direct and indirect costs of losing employees to competitors are enormous – and yet employees are potentially only one LinkedIn message away from being wooed. It’s important to look at all facets of your total compensation program – and ensure your benefits plan isn’t still the Model T. Only available in black.