Old thinking still dominates work practices

By David Brown
|Canadian HR Reporter|Last Updated: 09/04/2003

Despite all of the talk in recent years about how different things are in today’s working world, many employers are, apparently, still reluctant to make the kinds of changes to benefits and employment practices that will attract employees in a tight labour market.

A comprehensive new survey of businesses in the greater Toronto area, conducted by the Toronto Board of Trade, shows for example that just 11 per cent of organizations have introduced flexible benefit programs, less than one-quarter have wellness programs, only 13.8 per cent have introduced stress management programs, just 17 per cent offer maternity leave top-ups for new mothers and a mere 0.3 per cent provide employees with day-care subsidies.

“Overall, a lot of the numbers were fairly constant from last year,” said Eric Cousineau, chair of the benefits and employees practices sub-committee. Indeed little has changed in the past four years, he added.

What that says is employers still haven’t made the sort of radical break from tradition that today’s labour market requires. Canada is losing some of its best and brightest to the United States, yet employers aren’t doing the simple, low-cost things that will encourage employees to stick around, he said.

Organizations that want to assist working parents strike a work-life balance can provide day-care information and referral services, said Cousineau. Yet just 16.3 per cent of respondents to the Board of Trade survey do so.

Alternative work arrangements appear to be a hot topic and while 41.8 per cent of employers now offer flexible hours in some form, just 9.5 per cent allow for a compressed work week, a number that is down almost six per cent from last year. Employers that want to increase access to good employees are going to have to do more of these things not less, said Cousineau.

Commutes for a growing number of workers are becoming more stressful than ever and there is really very little need to have employees in at the office at the same time. But employers still seem to resist moving away from the old ways of running the business, for no other reason than that is the way it has always been done, he said.

The survey of 325 small, medium and large companies from a cross-section of employers, covers a wide spectrum from standard and flexible benefit offerings to costs and containment strategies to second-language premiums, business attire policies and vacation entitlements and is intended to help employers stay in line with current employment practices.

While Canada does lag behind the United States when it comes to flexible benefit plans — Canada is typically three to five years behind the U.S. — the low number is also a reflection of the difficulty small companies have in introducing flex-plans since it is riskier for insurers to support flex-plans in small companies where the costs aren’t dispersed over a large number of employees, said Cousineau.

Until the insurance companies can come up with products that pool those risks it is unlikely that small companies will be able to implement flex-plans, and that could take a while since insurers aren’t known for being progressive when it comes to delivering new services, he added.

For those businesses that had made the switch to flexible benefit plans, 27 per cent reported that costs had not changed, 24 per cent said costs had decreased, while 38 per cent responded costs had gone up.

For the most part, employers feel employees have a good understanding of how their flex-plan works. But, said Cousineau: “There’s the perception and then there’s the reality.” Survey employees and you’ll likely get a different answer. They have their benefit cards, and they know they can do things with it but they’re mostly unsure what exactly they can do. In other words employers should be doing a better job of educating employees on the value of their flexible benefit plans. Long-term disability is one of the most expensive benefits an employer can provide but employees tend to think of themselves as invincible and don’t care if the employer is offering LTD. What they don’t realize, said Cousineau is that about one in seven employees will need LTD at some point in their career.

More than three-quarters of respondents (78 per cent) reported an increase in benefit costs in 2000. Of those, 33 per cent reported an increase of 10 per cent or more.

The survey also found the use of part-time and contingency workers is on the rise. As a result there is also a marginal increase in the number of employers offering benefits to those workers. Look for that trend to continue, said Cousineau.

According to the survey, of those employers that rely on contract workers at the executive position, 24.2 per cent offer benefits, while another three per cent are considering it. While just 12.6 per cent of respondents extend benefits to administrative or support staff and only 1.5 per cent are thinking about it.

As far as pensions go, the move to defined contribution plans continues with the gap between the number of DC and defined benefit plans all but gone. According to the Toronto Board of Trade survey, 30.6 per cent of respondents now offer a DC plan and 31.3 per cent a DB plan. “I think we’re going to continue to see that happening,” said Cousineau. The reason? “A defined benefit plan is not going to attract employees to your workplace.”

(For a look at the difference between defined benefit and defined contribution plans see page 25.)

A sampling of some of the other findings from the Toronto Board of Trade survey:

•Better than half of all pension plans were contributory, 17 per cent were non-contributory and 28 per cent had both types of plans in place.

•While almost every company (99 per cent) offers benefit plans to full-time employees, 47 per cent offer benefit plans to regular part-time employees.

•When it comes to health care, 90 per cent provide some form of benefit to employees with prescription drug coverage being the most common, 31 per cent offer private hospital room coverage and the most popular vision care reimbursement average was $200 every 24 months.

•Slightly more than 16 per cent of organizations offer employees healthcare spending accounts to pay for procedures and services not covered by basic plans.

•Eight per cent of employers paid a premium for second language skills.

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