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How to build a total compensation package that satisfies employee demands
By: Benefits by Design | Tuesday May 14, 2024
Updated : Monday May 13, 2024
A comprehensive total compensation package is important if you want to attract and retain top talent. Did you know that replacing an employee can cost up to 2x their salary? Providing benefits and compensation that captures employees’ needs can help reduce turnover and save businesses time and money.
To keep up with employee expectations and industry standards, businesses should consistently evaluate the competitiveness of their compensation package. A new study found that almost 60% of employers were updating their benefits plans to satisfy employee demands.
At the same time, budget constraints are keeping employers from meeting those demands. A whopping 70% of employers are having a hard time covering all the benefits and perks employees are requesting.
So how do employers reconcile this? The best way is to focus on what employees need the most. Currently, employees are asking for help with the cost of living, further mental health support, and help alleviating financial concerns for the future.
How to Create a Total Compensation Statement (And Why You Should)
Parts of a compensation package that help with the cost of living
The cost of living in Canada has increased significantly in the last couple of years, brought on by inflation, the housing crisis, and supply chain issues, among other things. So, what can employers offer? The following list captures the elements in a total compensation package that can help. Aside from the first two, these provide financial relief by giving employees more coverage for medical expenses. If they become disabled, disability insurance provides financial security while they recover.
- Cost of living raises
- Increased paid time off
- Health Care Spending Account (HCSA)
- Personal Spending Account (PSA)
- Increased annual maximums and frequency limits for medical items and services within the health care and dental care coverage
- Increased non-evidence maximums (NEM’s) or monthly/weekly percentage of earnings under the disability benefit(s)
Benefits that help with improving mental health
Many employers have stepped up their offerings when it comes to mental health support. Whether due to a lack of communication, or services not matching their preferred access method, employees are asking for more. By providing a myriad of options, employees will hopefully be able to utilize at least one of them. Sharpen your mental health tools with the following total compensation package options:
- Increased sick leave
- Flexible work arrangements
- Increased annual maximums for registered psychologists, therapists, and counsellors within the health care coverage
- Coverage for self-help tools such as internet-based cognitive behavioural therapy (iCBT) within the health care coverage or under an HCSA
- Disability coverage for employees on mental health leave
- Employee assistance program (EAP)
Parts of a compensation package that help reduce financial anxiety
Finally, employees are struggling to save for retirement, and it’s causing them increased stress and anxiety. This stress can lead to a decrease in physical and mental health, and reduced productivity. Furthermore, 78% of employees believe their employers should be helping them save for retirement. Certain benefits within a total compensation package can help you do just that.
There are benefits to help employees save money now, which helps them save for the future. Professional growth and development can lead to higher compensation for them in the long-term. Meanwhile, some benefits provide financial security in the event of an accident, sickness or death. And lastly, Group Retirement Savings Plans (GRSP)s with a matching option help employees save directly for retirement.
- Professional development opportunities
- Increased life insurance, accidental death and dismemberment (AD&D) and critical illness insurance benefit payout amounts.
- Increased NEM’s or monthly/weekly percentage of earnings under the disability benefit
- Health and wellness subsidies in the form of a HCSA or PSA, or both.
- GRSP matching options
If you hadn’t noticed, many of the benefits listed above are repeated in all three categories. Meaning employers can tackle multiple issues with one addition or amendment. By offering a total compensation package that satisfies employee demands, employers can retain their talented employees.
Interested in finding out what else can be added to a Total Compensation Package?
10 Creative Additions for a Competitive Total Compensation Package
