The issues surrounding group health and benefit plans are challenging Canadian employers today in ways not seen in the past. Never have the issues seemed more complicated or diverse. Solutions are not easy, nor immediately obvious. As employers, and human resource professionals, we need to deal with the daily pressures at hand, while fixing our eyes on the future.

The trends and issues facing employers have been well publicized, but not always well understood: workforce diversity and changing demographics; the war for talent; globalization; healthcare reform; limited insurer choices; benefit plan cost and risk management; governance; and technology.

Faced with this daunting list of challenges the temptation is often to fall back on past choices, to employ strategies that worked in previous years, and to get drawn into short-term solutions. Don’t. Now is the time to think strategically about the next five to 10 years and to make forward-thinking, long-term decisions.

Understanding the impacts, issue by issue

As Canada’s workforce ages, and shrinks, attraction and retention become crucial. More importance is being placed on immigration to satisfy requirements for labour. And managing the increasing costs associated with an older population that’s living longer, and increasing the demand for post-retirement benefits, becomes critical.

There are at least four generations in the current working population, each with different core values, specific needs, wants, and work expectations. Employees, and their dependents, are far from homogenous. Marital status, geographic and ethnic backgrounds create a greater diffusion of employee profiles than seen previously.

Globalization brings mergers and acquisitions resulting in a loss of decision makers in Canada, and a concentration of business in fewer hands. It also gives rise to both a global war for talent and to complex and diverse international workforces. Employers need global approaches to benefit plan design and management—approaches that integrate global benefit policies and leverage global relationships, insurers and suppliers.

Governments, under even greater cost constraints, are faced with tough decisions about the expenses eligible under public plans. They will continue to look for opportunities to manage and lower public sector health expenditures, which will increase pressure on private plans to pick up the fallout.

The insurance industry today is far different than it was even five years ago. The number of group benefit insurers has reduced significantly meaning fewer choices for plan sponsors to manage complex risk. And many of the insurers in this market have developed a business model based on volume and commoditization instead of customization. The consequence is often reduced flexibility at a time when the exact opposite is required.

Governance standards and best practices are driving plan sponsors to seek out better processes for the administration of benefits, and to demand accountability in the financial management of their benefit plans. The need to perform thorough risk analysis and keep on top of governance issues is growing.

Technology is being used increasingly to deliver benefits, facilitate transactions and communicate with employees. It presents a tremendous opportunity to streamline the benefits delivery process and promote employee self-service. And the demand for technology will only increase as we look to engage an already diverse workforce in new and unique ways.

Strategies, and some advice for employers

Start now to plan for the next five years. Begin by articulating your benefits philosophy. Ensure that it aligns with your company’s broader human resource and business strategies. Alignment with corporate strategies is crucial and has impacts beyond winning the war for talent. An engaged workforce will generate better business results for the organization.

Develop a workforce strategy by creating a profile of your workforce today and what it might look like in five to 10 years. Try to determine what will be important to each demographic sub-group of employees based on age, immigration status, ethnicity, family structure, and other defining features.

Think about benefits within the holistic, total rewards approach. Pay, incentives, benefits, retirement plans, career opportunities, work-life balance, company culture, career opportunities and training can aggregate and integrate into an appealing employment contract for current and prospective employees. A total rewards value proposition supports your employment brand, and building a strong employment brand can help attract and retain key talent.

Think creatively and expand the traditional view of benefits. Diversify offerings to include wellness benefits, paid time off, perquisites and lifestyle accommodation benefits. Be aware that the features that attract employees to companies are not necessarily the same ones that will engage them or keep them.

It’s time to challenge traditional thinking about the way benefits are designed, and how they are valued. One size does not fit all—traditional benefit programs are not reaching a large segment of the employee population today.

Preparing for tomorrow

Employers need fact-based decision-making tools and data to create a workforce plan, identify employee motivators, weigh benefits within total reward choices, and compare cost drivers. Traditional benchmarks may no longer apply as competitors, and employee expectations, may be different in the global workplace. Investment in technology is necessary for efficiency and to deliver a rewards package that is customized to employees’ evolving preferences.

Plan sponsors must encourage and reward innovation by insurers, healthcare providers and other suppliers. As a group, employers need to work collaboratively to influence public policy and help governments understand the impact of their decisions on employer provided healthcare benefits.

There’s no better time than now to plan ahead, think strategically and make long-term decisions that strengthen your group benefit plans, and your business.

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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