Employers eye wellness benefit programs as tool to lure talent

A new study shows tension between providing attractive benefits and containing costs

Employers eye wellness benefit programs as tool to lure talent

In its inaugural 2018 Benefits Barometer Canada study, Hub International has found that employee benefits decision-makers are increasingly looking to implement health and wellness benefits programs to compete for talent.

“Now with an increasingly young and diverse workforce, we are finding that most Canadian companies are looking at benefits as a strategic tool for attracting and retaining talent in a highly competitive market," said Mike Barone, president of Employee Benefits at HUB International.

In the survey of almost 200 benefits decision-makers at Canadian companies with 20 to 999 employees, HUB found 38% citing improved health and wellness as their company’s top employee-benefits priority in 2018. Among those that are interested in implementing wellness programs, 29% said it was to boost employee morale, 23% cited productivity, and 22% said they hoped to reduce employee turnover.

However, the desire to improve health and wellness collides with the second- and third-highest priorities: to manage employee benefit costs (36%) and manage employer benefit costs (32%). When asked if their company has done all that they can reasonably do to control rising medical costs, 60% said they agree or strongly agree.

Among all Canadian companies surveyed, 22% have no plans to pursue new cost-management initiatives in 2019 or 2020; the number is higher for smaller firms (31%) and lower for medium-sized to large firms (14%). When asked about their historical efforts to tamp down costs, 24% said they had not implemented any cost-management strategies in 2017 (32% at small firms and 17% and mid-size and large firms).

The relatively low adoption of cost-management strategies could stem from struggles to convince C-level or upper management executives to pursue such initiatives, which were cited by 20% of respondents.

Flexible benefit plans were the most frequently cited cost-management strategy, as it was used in 2017 by 19% of all respondents and will be implemented within 12 to 18 months by another 24%. But when asked about the results, only 12% of those who have already used the strategy reported a measurable reduction in benefit costs.

“[C]ertain elements of flexible benefits, such as health spending accounts, can reduce costs but other aspects might actually increase utilization, cost and administrative complexity if not designed optimally,” HUB noted.

Other cost-reduction strategies were also cited, with similarly low numbers of respondents reporting measurable cost reductions. These include:

  • Changes to coinsurance for health or dental (13%)
  • Employee/employer split on premiums (12%)
  • Medical claim audits (10%)
  • Voluntary benefits (8%)
  • Aligning benefit costs with benchmarking (8%)


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