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Employers in Alberta, where the labour crunch is most pronounced, are finding it takes more than big money to attract and keep workers, according to a survey released Thursday by Hewitt Associates.

In addition to offering wage increases well above the national average, Alberta employers are competing to offer the best fringe benefits as well, Hewitt found.

"Some companies are providing employees - especially in 'hot' locations - with housing allowances, subsidies, loans …living allowances, computers with Internet hookups, assistance in locating housing and additional vacation time," said Dan Stewart, a senior consultant in the firm's Calgary office.

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Employers are forecasting average wage increases of 5.2 per cent in Calgary next year, compared with the national average of 3.8 per cent, the Hewitt consultants found.

"However, even with the current economic boom, it may become difficult to continue to increase salaries at these rates," Mr. Stewart said.

"Employers in Calgary are becoming more strategic both in what they offer and how they explain compensation, so they are well positioned to win not just the battle, but the war for talent," he said.

"They are setting the standard for employers in the rest of Canada as the attraction and retention challenge spreads beyond Alberta."

Employers are now going to greater lengths to explain how their benefits packages stack up against those of their competitors, said Keri Humber, a Toronto-based senior consultant with Hewitt.

"They may not be lured away by a competitor if they appreciate the value of the orthodontic coverage and pension plan provided by their current employer," Ms. Humber said.

Mr. Stewart said more Alberta employers are offering flexible work hours and sabbaticals to keep older employees in the work force longer - and are finding that these benefits appeal to younger workers as well.

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Most employers pay bonuses and other performance-related financial rewards, in addition to increases in base salary, Hewitt reported.

And flexible work arrangements are becoming more common. These include flexible hours, the option of working from home all or part of the time, and compressed work weeks.

"The challenge is what to offer next when so many employers are already offering them," the Hewitt report said.

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