As the coronavirus pandemic continues, Canadian employers are balancing the need to reduce benefits costs while focusing on employee well-being, according to a new survey by Arthur J. Gallagher & Co.
Just over half (55 per cent) of respondents said controlling costs is their top benefits-related challenge this year, with many considering measures such as variable cost structures and rebalancing cost-sharing. Only 35 per cent of employers said they currently have a strategy to manage health-care costs, with high prices of specialty (49 per cent) and non-specialty (43 per cent) drugs among the challenges in reducing expenses.
While a majority of employers said they still pay for the full costs of the benefits plan, the survey found fewer employers are offering full coverage of extended health-care co-insurance (down three per cent), extended health-care premiums (down six per cent), paramedical co-insurance (down six per cent) and drug plan premiums (down nine per cent).
The survey also found 68 per cent of employers have increased their focus on employees’ emotional well-being amid an increase in financial and lifestyle anxieties. More than half (56 per cent) of employers said they’ve increased their employee well-being initiatives during the pandemic. Of these, 37 per cent said they’ve launched new resources and tools, 19 per cent have expanded their overall programs and 19 per cent have increased support for their employees’ financial well-being.
“Employers’ priorities have changed as a result of the pandemic and leaders have shifted their focus from talent acquisition and retention to financial stability and business continuity,” said Melanie Jeannotte, chief executive officer of Gallagher’s benefits and human resources consulting division in Canada, in a press release. “However, while many employers have looked to reduce expenses in response to COVID-19, it’s critical to remember that employee well-being and engagement remain key components to business performance. As employers review total rewards cost structures to reflect new financial realities, it’s imperative they also address their employees’ evolving needs.”
As both employers and employees prioritize physical and emotional health, the survey found increased access to virtual health care and employee assistance plan options, along with more flexible sick-day policies and personal-day allowances, are becoming more important to the perceived value of benefits packages.
And with just 12 per cent of employers relying on a multi-year benefits management strategy in 2020, the pandemic has provided “a case for a longer-term roadmap that includes scenario planning and regular checkpoints,” noted the survey.