From an employer’s perspective, it’s easy to frame employment benefits as something you give away at cost. The only people to gain from this arrangement are your employees, as the recipients of these perks, which run the gamut of health insurance, retirement plans, and profit sharing.
It’s true that providing employment benefits can cost a lot of money. According to a Conference Board of Canada survey, the average cost of benefits for a full-time employee was $8,330 in 2015. Now, nearly a decade later, you stand to spend even more outfitting your staff with benefits.
All that spending can be challenging to account for, especially if you’re a relatively young or small business. But consider it a savvy business investment, as employers who provide their employees with competitive benefit packages attract better talent and reap certain tax advantages.
The Reality Is, Many Employees Need Help
Most people are feeling financially tender right about now. Balancing personal chequebooks can be tough after a few tough years of the pandemic, followed by red-hot inflation.
According to a survey conducted by the Chartered Professional Accounts of Canada (CPA Canada), only half of Canadians have an emergency fund, and one in four Canadians can’t come up with $500 in an emergency. Most would have to borrow money to handle a surprise expense, putting urgent and unavoidable repairs or medical expenses on a line of credit.
A line of credit can be a convenient backup to savings. There’s even a very good chance you have one of your own, plus a business line of credit. So, what’s the problem? Why can’t they rely on these accounts all the time? You can get your questions answered with a quick search online, but any lender will tell you: a line of credit should complement an emergency fund—not replace it outright.
What Safety Nets Can Employers Provide?
You can help your employees build better savings and rely on a line of credit less often by providing a substantial benefits package.
- Statutory benefits governed by your provincial and federal governments (including pension plans, paid time off, parental leave, and employment insurance).
- Medical and health insurance to pay for expenses not typically covered by public health insurance.
- Employer-sponsored retirement plans, with or without matching contributions.
- Profit-sharing benefits.
- Life and disability insurances.
Why Should You Consider Offering These and Other Employee Perks?
Reports say it’s a job seeker’s market. In other words, there are more vacant positions than there are skilled professionals available to fill them.
- Attract Professionals: Job seekers can pick and choose opportunities, and a benefit package is as big a factor in this decision as salary. In fact, studies show that a nearly one-third (30%) of people are willing to work for less if they get better benefits.
- Employee Retention: Your employment benefits package can not only help you attract your industry’s top talent. It can also help you hold on to these professionals, as they don’t feel the need to seek better options elsewhere.
- Tax Advantages: Sometimes, you can claim the premiums you paid on behalf of your staff. This tax-deductible expense can help offset the initial cost of your package.
- Penalty Avoidance: In some cases, you have a legal responsibility to provide certain benefits, such as a pension plan and employment insurance. Ensuring you follow the letter of the law means you can avoid costly fines.
Everyone stands to gain when you provide employment benefits. Reach out to your peers to see how they set up a benefits package for their employees before researching options. The sooner you update your benefits, the faster you attract talented professionals.