You go on a trip. You know the final destination, just not necessarily how to get there. You make a few wrong turns. You arrive at your destination, frustrated at the extra time and wasted effort. If you had the time and no pressing need to get to where you wanted, you may have enjoyed the journey. More likely though, you’ll wish you had mapped the trip in advance, or used the GPS.

A benefits program is no different — a trip with a purpose. The purpose is to maximize your return on investment — to get to your destination as efficiently and effortlessly as possible. The best way is to establish an overall plan — a map — for your benefits program to guide your decisions along the way. Without a map, you will waste valuable time and resources.

A benefits plan philosophy captures not only where you are today in terms of your benefits plan, but more importantly where you want to be tomorrow. It’s not static — it’s always a work in progress. It needs to adapt obstacles along the way and it needs to relate to the ever-changing environment within which it operates.

Often, employers start with a statement such as “we will provide a competitive benefits program.” This is a good start but a well-constructed benefits plan philosophy should also consider:

Alignment: A benefits program needs to support the organization’s business objectives. For example, if your organization is in a growth industry, how important are benefits to the demographic cohort from whom you expect to hire your future talent? Are they a “must have” a “nice to have” or a strategic imperative in the war for talent?

Integration: A benefits program is only one aspect of compensation, together with base pay, variable compensation, pensions, and perquisites. The relative positioning of the benefits program to each of these other components of compensation should be considered. A benefits program can also support broader human resource initiatives such as workplace wellness. Consider how all the various components should fit together to optimize your overall return on investment.

Competitiveness: A good benefits plan philosophy will be very specific on how the plan is positioned relative to the market. The market — or benchmark — will be clearly articulated as well as the metrics on which the comparison is to be made — e.g. plan provisions, flexibility, employer cost, total cost, etc.

Comprehensiveness: Understand where your levers are and embed them into a broad articulation of your benefits plan philosophy. For example, positions on cost management, flexibility or employee choice, cost sharing and/or entitlement could be incorporated. Statements regarding communication, plan administration and insurer relationships could also be added to round out the overall philosophy.

Time Frame: A benefits plan philosophy and programs need to be constantly updated to reflect changes in the environment. A well-constructed benefits philosophy will clearly articulate the need for regular review.

Charting your course through a benefits plan philosophy will not prevent you from making a few wrong turns along the way — even with GPS it is possible to get off track. However, the time, effort and expense related to getting back on track will be greatly reduced. Sometimes it can be enjoyable to get lost and discover the sights, but most organizations do not have the luxury of making countless wrong turns.

Establishing a well thought out philosophy does not take a lot of time or effort and it can help you avoid the wrong turns, and make course corrections much easier.

Brian Lindenberg is a senior partner and the health and benefits leader at Mercer Canada.. He has more than 30 years of experience in the employee benefits field.

These are the views of the author and not necessarily those of Benefits Canada.

Copyright © 2020 Transcontinental Media G.P. Originally published on

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