True Benefits Blog

2010 Government Benefits Update

Each year, government benefits such as EI and CPP are updated. The figures for 2010 have been summarized on a PDF available at our website.

Rachel von Sturmer, BA, GBA, CFP

www.truebenefits.ca

Popular Employee Benefits and Allowances

According to Benefits Canada, here are the most commonly offered employee benefits and allowances. Does your office cover these?

Insured benefits:

• Medical (71%)
• Life insurance (57%)
• Dental (52%)
• Accident (47%); and
• Vision care (35%)

Allowances:

• Mobile phones/telecommunications (29%)
• Cars (29%)
• Gym memberships (28%)
• Childcare (24%)
• Food (18%)
• Public transportation (15%); and
• Housing (13%)

Rachel von Sturmer, BA, GBA, CFP

www.truebenefits.ca

Earnings Gap in BC Getting Bigger

An interesting article from Advisor.ca:

"The income gap between the wealthy and the middle class is growing in British Columbia, with 60% of families earning less than comparable families in the 1970s, according to a study by the Canadian Centre for Policy Alternatives.

Between 1976 and 2006, real pre-tax earnings fell for the families in the bottom 60% of the income scale in B.C..

The poorest 10% of the population saw real incomes plummet by 74%. The sixth decile — those ranking between the top 50% and top 60% — had their real incomes cut from $70,000 in 1976 (in today's dollars) to $65,000 in 2006.

'Recent studies and media reports have focused on the vulnerability of poor British Columbians as we enter a recession," says report author Iglika Ivanova. "But our study shows that the middle class is vulnerable too — and much more so than in the rest of Canada.'

The study also found that families in the top 10% of the B.C. income spectrum now earn more than the entire bottom half of the population."

Rachel von Sturmer, BA, GBA, CFP

www.truebenefits.ca

Communication Gap

From Human Resource Executive Online:

In a recent survey of more than 650 human resource managers and benefits administrators at the recent national conference of the Society for Human Resource Management, employers were asked about the benefits they provide and how much their employees understand those benefits.

Over 90% of employers who responded said it was important to their business that employees understand and appreciate the value of their benefits. Only 21% of employers think their employees have a good understanding of their benefits. Nearly 5% think their employees know nothing at all about their benefits.

"These findings are critical for all employers, but we aren't surprised," said Tom Gilligan, senior vice president for Colonial Life. "Employers who have implemented a benefits communication plan have been telling us for years how important that has been for the bottom line. Employees who have been properly educated about their benefits tend to stay on the job longer than those who don't understand their benefits".

Research has shown that employee loyalty and morale are directly tied to the benefits they receive. The more employees know about those benefits, the more likely they are to be happy in their jobs.

In a study conducted by Watson Wyatt Worldwide, employees gave higher marks to employers who provided fewer benefits but explained them well, rather than a richer array of benefits they didn't understand.

In similar studies conducted by MetLife, workers indicated that benefits were one of the primary reasons they are loyal to their employers. Employees ranked benefits second only to salary as the most important factor in determining how long they stay on a job.

Other findings from the Colonial Life survey:

• 90% of employers said having one-to-one meetings would significantly improve employees' understanding of their benefits but only 58 percent of employers offer them

• 80% use employee group meetings to explain their benefits

• 44% have employees enroll for benefits using the Internet

• 40% of employers require employees to self-enroll for their benefits

Click here to access the full article.

Rachel

www.truebenefits.ca

Employer Pension Accountability

An interesting article at Advisor.ca on potential liabilities for employers who sponsor employee pension plans.

Rachel

www.truebenefits.ca

BIV: Pensions and Retension

From the article, Pensions may serve as magnet to find, retain seasoned employees in Business in Vancouver's most recent issue:

"A growing proportion of human resources executives are considering pensions as an employee attraction and retention tool after years of being considered a financial liability for a company. For years, CFOs have had to struggle with under-funded pensions that did not have enough assets to cover the pension requirements of its employees.

The financial challenge of dealing with this liability led CFOs to consider it a major crisis. In 2006, more than 60% of CFOs surveyed in a Watson Wyatt study considered the issue a widespread crisis with a typical pension fund being only 86% funded at the end of 2005. But that’s clearly changed based on results of a recent survey that found only 26% of CFOs surveyed earlier this year saying a crisis still existed and was long-lasting.

With pensions in better financial shape, human resources executives are more likely to increase their role in plan design in order to attract and retain experienced employees and management.

The survey found that while half of CFOs and HR executives said financial considerations still outweigh human resources issues, only 30% said it would in the next five years.

But the attraction of pensions is for the more seasoned employee or management, said Rachel von Sturmer of Vancouver’s True Benefits.

"Employees fresh into the workforce are looking for flexibility, which can be found in the form of benefits like health spending accounts, lifestyle balance through flexible working arrangements, and room for growth within the company," she said."

Rachel

www.truebenefits.ca

Group Tax Free Savings Accounts (TFSA)

Coming into effect in January 2009, the TFSA will enable Canadians to put aside $5,000 per year to grow in a tax sheltered environment. Similar to an RRSP, the TFSA has the additional flexibility of being non-registered.

Look out for a group type TFSA product to hit the markets in early 2009. I believe this will look like a hybrid of the Health Spending Account (HSA) and a Group RRSP and should prove to be very popular for both employers and employees.

For more information, click here.

Rachel

www.truebenefit.ca

What Employees Want

Want to find out what they're really thinking? Just ask them... and make sure they can answer anonymously. More and more employers are using online poll tools that offer confidentiality and help gather real opinions.

A key to conducting this type of poll is to bring in an objective third party who can vouch to employees that their answers will be completely private.

Here's how you do it:

Working with your benefits broker or HR specialist, determine the type of information you are trying to uncover. In this example let's assume we've got an employer with higher than desired turnover that wants to find out "how happy are employees with their benefits and compensation".

Compile a list of questions that will solicit helpful feedback, such as:

• Do you think you are fairly compensated for the work you do?
• Are you satisfied with your current pay structure?
• Do you feel that compensation is competitive within the industry?
• How happy are you with the employee benefits provided?
• Which benefits do you feel are most valuable?
• Please tell us how we can improve our employee benefit package?
• Are there any issues at the company that you think we should know about?

The example company should be ready to hear things that may be negative, but will ultimately be useful in shedding light on their high turnover. They can hopefully use the survey results to adjust their total compensation program, or to address other HR issues.

Contact us to find out more or get started.

Rachel

www.truebenefits.ca

Above and Beyond Benefits: Creative Employee Perks

It can be a challenge finding, keeping and motivating staff. To help you I've compiled a comprehensive list of creative employee benefits. Costs range from absolutely free to very pricey, and can be scaled depending on the size of your organization and budget.

Flextime: Employees love flexibility! They're busy, and any opportunity to be more effective in their personal lives will reflect positively on the work they do. This is also a fantastic way for smaller employers to be competitive in attracting and retaining employees. Examples of flex arrangements include:

-Offering employees the option of working 30 minutes longer each day in exchange for every third Friday off

-Allowing optional start times such as 8 to 4, 9 to 5, or 10 to 6

-A four day, 10 hour workweek

-One day a week working from home

Paid Education: Support employee advancement and take an interest in their career development by covering all or a portion of exam, course and other learning costs.

Transit: Consider offering a company sponsored transit pass (such as BC Transit's). Set up a carpooling page on the company intranet. Offer incentives for employees to bike, bus or rideshare to work.

Wellness and Fitness: Arrange for reduced corporate membership rates with a local gym, bring in a yoga instructor or massage therapist once a week, or stock healthy snack options in the office.

Mentorship: This is a great way to introduce new employees into their role, or help younger people with career development. Try partnering new employees with a senior member of the team for regular check-ins, or have executives take employees out to lunch for some one-on-one time.

Other Insurance: Having a general insurance agent visit your office to renew car and home insurance during lunch hour can be a great time saver- and it's free. Pet insurance is often available at a preferred group rate, and is becoming a popular way to limit the risk of huge vet bills.

Referral Reward: Offering employees a reward for the successful referral of a new hire is a great way to find new staff. The reward could be monetary, extra vacation time, or merchandise.

Social Events: Having social get togethers builds relationships and encourages everyone to have some fun together. Have an afternoon Wii tournament, a day of volunteering in the community, or pizza lunch on Fridays.

I hope you've been inspired with a new way to let employees know how valued they are! If you've got another great idea for an employee perk, please share it in the comments section.

Rachel

www.truebenefits.ca