Benefits consulting in Atlantic Canada is like standing on a rock-bound cliff in the face of a nor’easter: you know rough and risky times are ahead but you stand firm. Sometimes you get the show of a lifetime; oftentimes you just get soaked.
Atlantic Canada has weathered its share of economic storms, but right now there is no better time to be involved in the benefits industry. The aftermath of recent financial upheaval has actually strengthened some industries, given rise to new sectors and turned the tide of out-migration: where once Atlantic Canada’s youth and talent flowed steadily west and south, more and more now remain in the region, and those who have been away are returning home to be part of the rebirth. These continuing developments have made benefits consulting particularly interesting, albeit challenging, in the past year and promise to do the same in the immediate years ahead.
The Marketplace
Compared with other individual markets, each Atlantic province has a sparser population density (for example, P.E.I. is 5,600 square kilometres with a population of 140,000) and less industrial diversity than most other Canadian cities. As a result, Atlantic Canada has always posed a commercial challenge.
But these isolating attributes have given rise to natural resource economies that continue to lead the financial and cultural evolution of Atlantic Canada. While many North American centres wrestled in the grip of our recent economic meltdown, Atlantic Canada posted only slight changes in unemployment. And its residential housing market has only recently shown a slowdown, even as its neighbours to the west and south coped with plummeting sales and values. Fishing, forestry, mining, hydroelectric production and offshore petroleum industries have endured economic, political and ecological maelstroms to remain key employment sectors and economic indicators. Oil and gas projects in the North Atlantic have generated several billion dollars in economic activity and continue to support a growing network of specialty manufacturing and knowledge-based companies. Newfoundland and Labrador’s royalties were enough to remove the province from federal equalization payments in 2008 and continue to erase the “have-not” stigma too freely attached to the Atlantic region.
Nova Scotia and New Brunswick are also seeing increased activity and economic diversity with petroleum exploration, harvesting and refining. Prince Edward Island, long a major agricultural producer, is finding renewed growth in the high-tech sector, including bioscience, new media and IT. P.E.I.’s major export continues to be potato products, yet its No. 2 field is now aerospace: exports in this industry grew by nearly 70% in 2008 and another 10% in 2009.
The Benefits Landscape
As the economy fluctuates, so does the demand for benefits products. An advantage in Atlantic Canada is customer loyalty; Atlantic Canadians take their workplace relationships seriously and will abide by them in good times and bad. However, the survival instinct is also strong and when budgets must be cut, benefits plans are often nipped before payroll. As a result, strong relationships anchored by personal attention and flexible options have been instrumental in allowing the benefits industry to weather the inevitable upheavals, but it has increased the cost of doing business as well.
Products have evolved to meet the needs of smaller unique markets and a new financial landscape. Self-insured health and dental products by both employers and employees continue to be favourably received. Any product with the flexibility to meet the needs of a client without forcing payment for services not wanted or needed is a strong seller. Atlantic Canada has less than 500 companies with 1,000-plus employees, so products that are able to provide solid coverage for smaller workplaces without overwhelming costs continue to do well.
Opportunities Galore
The challenge for the benefits industry remains the proof of return on investment, clarifying the need for purchasing what can be an ambiguous or “what-if” product. Maintaining costs and meeting benefits needs are complicated by two other factors. According to Statistics Canada, Atlantic Canada is aging: for each Atlantic province, the group age 65 and older outnumbers or closely trails those ages zero to 14. In addition, Atlantic Canada demonstrates more chronic conditions—heart disease, multiple sclerosis and some cancers—than the national average. The rate of diabetes in Atlantic Canadians age 70 and older is 35% higher than the national average.
Awareness of benefits program advantages has come a long way from the days of door-to-door life insurance, but some clients remain averse to investing in anything intangible. This evolution is ongoing—one client at a time—but there are certain ripples from the recent economic storm that will work in the Atlantic benefits industry’s favour.
As mentioned, the workforce tide has shifted somewhat in the aftermath of the economic downturn. Through client experience, Fraser & Hoyt Benefits has seen Atlantic Canadians continue to earn their living in other parts of North America and beyond, but a greater percentage of youth and skilled workers are either staying in Atlantic Canada or returning after employment away. Atlantic employers recognize, for their own economic survival and that of their communities, the need to keep and attract skilled workers in this region. Benefits plans are now seen as a key tool in retention and employee satisfaction. Where once job opportunities were weighed primarily on salary, now the issue is quality of life, including affordable medical care, dental care, income protection in the event of accident or illness, and financial protection for loved ones in the event of injury or death. Employers are realizing that investment in a comprehensive, affordable benefits plan may tip the balance in their favour in what is now an employees’ market. The reality is, many workers wish to live and raise their families in Atlantic Canada yet will not sacrifice their financial security to do it. With a good job and solid benefits package they tend to stay, even if wages are below those in major markets.
Employer interest is building in health and wellness programs and providing proactive options to tackle rising healthcare costs while promoting good quality of life. These programs place employers in a supporting role to employees’ individual responsibilities for good health. Smoking cessation, physical activity, healthy eating, chronic illness management and workplace team building are some of the wellness initiatives that have been embraced by some Atlantic employers and observed with interest by others willing to try something new to make their workplaces more productive and attractive to employees.
Succession Planning for Success
Atlantic Canada’s aging population heightens demand for succession planning. Many family businesses continue to be run in whole or in part by a founder past retirement age. Where succession planning was once a simple passing of authority, today there are complications with next generations arguing over who gets the chair, or wanting nothing to do with the business at all. Product offerings have expanded but since suppliers have consolidated, employers’ budgets have tightened in response to the economic storm, reducing the number of jobs into which to recruit new candidates and tightening access to training that would advance them through the ranks.
Atlantic Canada has always been a unique marketplace, and while it can be challenging with its low population, vast geography and cultural divides, it remains an economic stronghold in these shifting financial times. Traditional industries continue to be a solid foundation for employment while supporting growth in emerging sectors, resulting in lowering unemployment, increased provincial revenues and an economy in need of the products and services the benefits industry is able and willing to provide. There have been some damaging winds and a few soakings, but the recent economic storm has again proven that for those who live and work here, the horizon is clearing and the outlook very bright indeed.
Russ Oehmen is vice-president of Fraser & Hoyt Benefits.
> click here for a PDF version of this article