© Copyright 2006 Rogers Publishing Ltd. The following article first appeared in the October 2005 edition of BENEFITS CANADA magazine.
In bold print
Showing employees the individual costs associated with their benefits may make them think twice about how best to use them.
By Sonya Felix

Like most benefits plan sponsors these days, the B.C. Public Service Agency is struggling with cost containment. “It’s our biggest issue,” says Martha Kenney, the Victoria, B.C.-based executive director for the Agency’s policy and benefits division. But, instead of drastically cutting benefits to the 34,000 employees spread over 150 communities, the Agency choose an increasingly popular tool for battling rising costs: a personal total compensation statement.

The decision to emphasize communication as a way to help control costs started about a couple of years ago. The Agency developed a benefits philosophy to articulate the reasons behind employee benefits and to emphasize the fact they help ensure a healthy workforce, says Kenney. “We wanted to point out that since benefits are good for both employers and employees, both sides have an obligation in cost containment.”

To get this message out, the Agency implemented a communications program to explain the types of benefits offered and what they cost. Provided through internal mail, the glossy brochure contains benefits updates, answers to frequently asked questions and offers health and safety information.

But the highlight is the personalized section listing total compensation for the year, which gives employees a breakdown of their salary, including paid time off work, and their personal benefits costs for the year.

“People often forget that benefits, including sick and vacation days, have a cost,” Kenney says. “So we set out to quantify everything about pay for time worked and pay for time not worked such as sick leave and vacation. Not many people think about their total compensation in those terms or think about the actual cost of benefits.”

An employee survey taken after delivery of the first compensation statement found a very high positive rating and more than a third said they had learned something new. The negative response was surprisingly low, Kenney adds. “We were encouraged by the survey. Since cost containment is such a big issue with us, we walk a very fine line when it comes to spending taxpayers’ money. But the survey showed that we didn’t waste money.”

It is still too early to tell what impact the personal compensation statement is having on benefits costs, but there are indications that people may be thinking twice before using benefits or calling in sick. “Our average sick leave went down by two days in the past two years,” says Kenney, although she admits that it is hard to directly link the decrease to the communications program. “We use the statement to highlight good practices and I think it is having an effect.”

Sonya Felix is a freelance writer living in St. Catharine’s, Ont. sfelix@look.ca