Businessman with his finger on the word BENEFITS

Oil Bust Increases Employee Benefits Cost to Employers

The oil bust effect on benefits plans is a real cause for concern for employers. The decline of oil prices over these past few years has not only negatively impacted the Alberta economy but it has also had a detrimental impact on employee benefits according to Benefits Canada. This decline has made it difficult for HR departments since they now have less competitive benefits programs to offer in attracting talent.

What Is Driving Up Costs?

Instead of reducing the cost of employee benefits to the employer, this economic downturn can have the opposite effect. If one spouse or the other is laid off, the benefits plan of the employed spouse then becomes the sole plan.

Employees also tend to increase their usage of a benefits plan if they’re concerned that they might be laid off. They tend to want to purchase that new set of glasses, or get that dental work done before they are forced to live without the benefits.The oil bust effect on benefits is immediate.

Even apprehension about the potential of a layoff can increase the number of visits to psychologists, massage therapists, and acupuncturists. Companies may find themselves in a position of having to increase cost sharing by employees or reducing employee benefits coverage altogether.

Long Term Relief

Long-term relief is only likely to occur when oil prices rebound, and who knows how long that might take. Also, once spouses re-enter the workforce and begin using their own benefits programs again, per capita costs are likely to decrease.

While new benefits proposals from other carriers might offer some immediate relief, you must be aware that benefits rates could very well boomerang back once the economy starts to move again and your first renewal is due.

Do you still have questions about the oil bust effect on benefits? To help you navigate through Alberta’s interim economic crunch and explore better options for reducing employee benefits cost to you, the employer, please contact us online or call our Benefit Strategies advisors at 1-780-437-5070!

Group at a table discussing benefit plan design changes.

5 Reasons for Employee Benefit Plan Design Change

Could it be time to reassess your employee benefits plan design?

In a Benefits Canada article written by Brian Lindenberg, we are presented with five compelling reasons for improving and/or designing employee benefits programs in your workplace.

  1. Your employee benefit plan risks are changing or have changed.

The whole purpose of custom employee benefits plan design for your workplace is to manage or fund the risks of organizational and individual health, as well as employment risks, repititional risks, and compliance risks. Lindenburg gives the example of paying for higher-priced prescription drugs. Your employee benefits plan must be responsive as benefits risks increase or change, and become more costly.

  1. Your employees are becoming more transient.

According to a 2015 Mercer Insider Employees’ Minds survey, “35% of all employees are seriously considering leaving their jobs, despite being reasonably happy” with both their current company and their career opportunities. Employment is now measured in months or a few years rather than decades like generations past. In the next ten to twenty years, it is expected that a significant number of employees will shift to become contractors. As more and more contingent workers become the norm, the stability and security of pay and traditional employee benefits may no longer be enough to maintain your talented workforce.

  1. Your employees will need proactive health management and advanced medicine.

Recent years have seen a major shift towards proactive health management rather than traditional health benefits that only respond when someone is sick. Changing technology and advances in medicine are also bringing in new medical treatments including genetic testing and digital health technology. Does your employee benefits plan design give your employees the freedom and ability to take advantage of new healthcare technologies?

  1. Your workforce is becoming more diverse.

Age and culture are major value drivers for various aspects of employee benefits in Canada, such as disability and life insurance. Flex benefit plans try to address the fact that certain employee benefits are more important to different people but often fail to address every individual’s needs.

  1. Your employees expect higher levels of customized benefits.

Today’s economy is driven by high customization and individualization. People can choose exactly what they want and when they want it. On the other hand, traditional employee benefits plans (like the one you may have implemented in your workplace) are based on the collective needs of the workforce rather than the individual. Customized benefits may be worth looking into.

Summary

Overall, the argument is that Canadian’s expectations towards their employee benefits plan design are becoming more customized and that benefit plans will need to embrace recent advances in healthcare, medications and technology. The Canadian workforce is also becoming more diverse and more transient in jobs and the people that do those jobs. All of these factors could mean that how you think your employees value their employee benefits plan today, or in the future, may not actually be accurate. You can read Benefits Canada’s full article here.

Is your current employee benefits plan design meeting the needs and expectations of your employees or the workforce?

Call Alberta’s trusted employee benefits company, Benefits Strategies Inc., at 1-780-437-5070 to speak with one of our employee benefits advisors about custom designing an employee benefits program for your company and your valuable employees.