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Déjà Leonard is a copywriter and freelance journalist based in Calgary.
Signing and retention bonuses are usually geared toward executives, but Toronto-based startup Benefi is looking to tweak this concept with a product that businesses can offer to all employees.
“We look to solve a real problem that employers have been encountering for the past couple of years … the bonds between employer and employees have largely been broken,” said Patrick Dunn, Benefi’s chief executive officer.
In Benefi’s bonus vesting program, companies offer employees a loan at zero-per-cent interest that is “forgiven” after a specific amount of time as long as the employee is still with the company.
For example, a company can put together a job offer for an employee that contains a bonus vesting opportunity of $10,000 that will be forgiven between six and 36 months. The employee would receive the cash right away, and the loan would be forgiven after the specific amount of time stipulated in their employment contract.
Obviously, the added-up-front cash helps employees, but it can also benefit companies by helping to attract and retain talent in an extremely tight labour market.
Mr. Dunn refers to it as “a new idea based on a really old idea.”
Accessing funds quickly like this could help a variety of employees, considering new research shows 75 per cent of employees are stressed about their finances, and 84 per cent believe employers should be responsible for their financial well-being.
As companies consider a more holistic approach to employee wellness, benefits providers are also considering how financial wellness affects companies and their people.
According to insurer Manulife, employees’ financial wellness can have a big impact on a company’s bottom line because these issues follow people to work.
Manulife data shows 93 per cent of professional counsellors said financial stress directly impacts productivity. With 40 per cent of surveyed working Canadians stating they are financially unwell, this can translate into huge losses in productivity and revenue for companies.
Using a bonus vesting approach may be a solution to help employees overcome financial challenges, while helping employers retain talent for longer. In the example above, if the employee decided to quit or was fired before their whole bonus was forgiven, they would need to pay some of the cash back, based on the terms of their agreement.
Mr. Dunn said he has seen big shifts in the market when it comes to signing bonuses. He is seeing industries that typically don’t offer these perks – such as manufacturing, service and hospitality – using signing bonuses as a way to attract talent.
However, it can be challenging for companies to manage the process from signing to the potential clawing back of funds.
“Benefi helps alleviate some of that pain. Not only in offering a better sign-up bonus, and the ability to offer retention bonuses, but a better way to manage it, and a better way to manage the experience,” he said.
What I’m reading around the web
- Are the days of remote work already numbered? According to LinkedIn’s HR officer, Steve Cadigan, getting Gen Z and millennial workers back into the office to nurture relationships will be essential to combat the Great Resignation and potential challenges that come with a recession.
- One analyst from National Bank says that the Rogers’ outage last week, which took out 25 per cent of Canada’s internet and cellular service, cost the Canadian economy $142-million. Here’s what it means for the company, which is facing multiple lawsuits, and its consumers.
- Former billionaire Chuck Feeny has reached his goal of donating all his money to charity – and he’s done it all anonymously. Now, he’s become a model and inspiration for other influential entrepreneurs and philanthropists who want to make an impact.
- The first Black female team president in the NFL, Sandra Douglass Morgan, has been hired by the Las Vegas Raiders. Read how Ms. Morgan is breaking barriers and plans to help take the Raiders to new heights.
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