With the price of consumer goods, from hot dogs to houses, rising steadily in Canada, some employers are thinking outside the benefits box to help ease the cost of living burden for employees and provide support beyond raising wages.
According to Statistics Canada’s latest consumer pricing report, the inflation rate rose 3.7 per cent on a year-over-year basis in July, up from a 3.1 per cent gain in June. On a monthly basis, the consumer price index rose 0.6 per cent in July, the fastest pace since January 2021.
In recognition of the strain the higher cost of living can have on employees, some employers are re-tooling their benefits offerings in an effort to attract new hires and retain staff. “It’s a difficult time for everyone,” says Kim Siddall, vice-president of enterprise consulting for the west at People Corporation. “A lot of employers are . . . trying to rein in expenses or interruptions to productivity or revenue streams, while there are a whole lot of employees who have had some time for retrospection and are making other decisions about employment. So we’re seeing an exodus of people happening, creating an attraction and retention issue.”
One way to attract and keep top talent is to provide greater flexibility. Amid the coronavirus pandemic and temporary switch to remote work, many employees have already left higher-cost cities or cities with red-hot housing markets to move to smaller centres because, financially, it’s more manageable and they can now work from anywhere, notes Siddall. Allowing permanent remote working post-pandemic is one way employers can help employees balance their budgets.
Meanwhile, Ontario-based engineering consultancy firm C.F. Crozier and Associates Inc. is helping its employees buy in the red-hot Greater Toronto Area housing market by providing its employees with $20,000 to use as a down payment on their first home. But offerings like this one is still quite rare, says Siddall.
She notes People Corporation is seeing more interest from plan sponsor clients in customized rewards programs, inclusive or family-friendly benefits such as fertility, surrogacy or adoption support, as well as debt reduction, savings plans or flexible plans that provide options on where to direct credits.
Employers are also looking at ways to make their benefits offerings more inclusive, so they address their entire workforce’s needs, regardless of how they work — whether in person, remotely or both, says Siddall. A brick-and-mortar building with a gym may not make sense anymore for employers that have embraced hybrid work models in the wake of the pandemic. She suggests these employers consider how they can provide equity for employees who work remotely and ensure they receive a similar employee experience to that of their colleagues who work in the office. “There’s a bit of a reckoning for employers in terms of looking at the value of the benefits and whether they still make sense in today’s climate.”
Siddall says some companies may choose to keep their gym facilities but can help with staff’s personal wellness budgets by giving employees allowances to either purchase exercise equipment for their home or join a gym in their community.
On top of tweaking benefits offerings, her plan sponsor clients have also expressed interest in compensation studies, as well as taking a look more broadly at human resources policies and total compensation packages. Regular compensation studies take things like higher costs of housing and living into consideration in different markets and sets wage levels based on different geographies, she says, noting the cost of living is much higher in some markets compared to others so that should be taken under consideration.
Employers should also take the bigger picture into consideration when choosing or adjusting their pay strategy and benefits offerings amid rising inflation. “They’re really going to have to take a good look at value and how their offerings meet the needs of their workforce for the current times.”