Record low unemployment rates are ratcheting up the talent wars and forcing many businesses to spend more on employee benefits. But even though employers are facing rising health and dental benefits costs, many are seeking out additional perks to attract and retain workers.
Companies today are compelled to offer unique perks for staff – everything from partly funded vacations to financial support for side gigs – to stand out in today’s tight labour market, with Canada’s jobless rate sitting at just 5.6 per cent.
These extras are alongside traditional health and dental benefits that are now considered minimum requirements at most companies, big and small. Even benefits that used to be uncommon, such as wellness accounts, and non-monetary perks such as the ability to telecommute, are now considered standard, especially in highly competitive fields such as technology, engineering and finance.
Small businesses are particularly challenged to offer generous employee benefits given their limited financial resources compared with larger companies, and owing to the steadily rising costs of health and dental plans, driven by the higher price of health care and pharmaceuticals.
"It’s a fine line to manage those costs,” says Chris Gory, employee benefits adviser and owner of Toronto-based Insurance Portfolio Financial Services.
Still, Mr. Gory says strong benefit plans are no longer a nice-to-have. Even smaller companies with only two or three staff members are starting to offer standard health and dental plans, he says, which wasn’t the case even a few years ago.
“You really have to put a plan in place that will attract and retain people, and it has to be competitive," Mr. Gory says. “Companies are constantly thinking of new and fresh ways to attract and retain staff."
Roy Pereira, founder and chief executive of Toronto-based AI software company Zoom.ai, which has 17 employees, says finding staff is the top issue for tech companies in Canada. Offering both standard and rare benefits is one way his company tries to attract and retain workers.
Health and dental plans are baseline "and they’re not cheap,” says Mr. Pereira, who started Zoom.ai in early 2016. The total cost for his company’s health and dental plan is about $5,000 a month, which is roughly equal to the monthly salary for one employee. The plan price increased by about 15 per cent in the second year it was offered, which experts say is common for startups that are often given discounts in the first year as an inducement to sign up.
“We have to eat those costs, but are creative about everything else,” Mr. Pereira says. For instance, Zoom.ai recently began offering an employer-matched travel saving plans through a service offered by Toronto-based startup Vacation Fund. Zoom.ai will match an employee’s vacation fund for up to $25 a month, or up to $300 a year, and may increase that amount as the company grows.
“We brought in Vacation Fund to promote the fact that we want our employees to have a regular, healthy life,” says Ms. Pereira, who returned to Toronto from Silicon Valley in 2003 to find more work/life balance of his own. “It also differentiates us from the larger competitors."
At Vancouver-based public relations firm Talk Shop Media, which has 35 employees, some of the benefits include a four-day workweek in the summer, an on-site gym and organic food delivery to the office, as well as generous professional development spending as part of its "human resources and culture” budget.
The budget, which also includes traditional health and dental benefits, is about 3 per cent to 5 per cent of its annual revenue. The new Employer Health Tax in British Columbia – which kicks in this year and replaces the former Medical Services Plan premiums that were generally paid by individuals – will add another 1 per cent to that total.
Talk Shop also budgets about 3 per cent to 5 per cent of its revenue for an “InResidence program,” which allows staff to incubate small businesses and gain investment, if their idea is approved, while still receiving a full-time paycheque.
Sara Padidar, Talk Shop’s co-founder and principal, says the program helps eligible staff follow their entrepreneurial spirit and is in line with the kind of employee they want to work for them and their clients.
It’s not a major concern that staff will take their business and leave, says Ms. Padidar. "We know that a lot of our employees are passionate about what they do for Talk Shop, but we are under no illusion it will be like that forever. ... We are giving them the freedom to be honest about that and pursue it with our support.
If someone does leave to pursue their new business, it would be a sign of success, she says. It will also help the agency be seen as a place where companies can grow with the right marketing and business strategy.
While having strong benefits are a must-have and the right thing to do, Ms. Padidar says the company appreciates that it takes more than perks to keep staff in today’s highly competitive market.
Based on regular feedback from existing and former staff, Ms. Padidar says Talk Shop understands people want to work for employers with similar values and that can offer career-growth opportunities.
“At the end of the day, it’s not what’s in your medical plan or how much organic food you have delivered to the office that will make or break whether or not someone joins the organization,” she says.
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