Cheap – but highly valued – benefits

To combat rising costs, try offering flexibility, get-togethers and discounts

Attracting and retaining the best talent is arguably “job one” for HR professionals. Continuing to meet that mandate has become a little more expensive each year since traditional benefit plans — highly valued by employees — continue to increase in cost at a rate above inflation. Add on a retirement savings plan, Canadian Pension Plan payments, employment insurance premiums and other statutory benefit costs and they represent a significant portion of payroll. The cost of health benefits alone has increased at three times the rate of salary increases in the last five years.

Employees know times are tough and many are glad just to have a job. But that doesn’t mean workers will happily accept a cutback in benefits. So where do employers go from here? Rather than terminating programs, many employers are returning to some of the essential elements that can make a difference at an individual level — things that truly engage an employee after the “expected” has been provided.

When plan sponsors are squeezed by a recessionary economy, there are hundreds of ways employers can reward and engage employees. Here are some common, but progressive, ways employers are going beyond health and dental benefits to show genuine interest in the well-being of employees:

Direct rewards program: These are designed around the workplace or environment and organizational goals, to resonate with people on a day-to-day basis. The recognition must be achievable, timely, sincere and meaningful at a personal level.

And it doesn’t need to be costly to be effective. Studies in employee behaviour going all the way back to Abraham Maslow’s A Theory of Human Motivation find little things mean so much to individual performance and engagement, such as saying “thank you.”

Employee and family assistance: Although viewed as somewhat traditional, it’s surprising how many employers don’t have an employee assistance program (EAP). Everyone needs a little help from time to time — from the most hardened executive to the stressed assembly-line worker — on issues ranging from marital and relationship problems to substance abuse. Compared to health and dental care benefits, an extensive EAP can pay dividends to the bottom line by keeping employees emotionally healthy, motivated and engaged.

Deferred drug card: This isn’t the pay-direct drug card HR has probably considered but shelved due to the cost. This is a deferred card that gives employees the convenience of a point-of-sale transaction (no paperwork) but requires the worker to pay for the prescription at the counter. Like other pay-direct cards, deferred cards instantly adjudicate a drug claim but the reimbursement appears in a worker’s bank account in about two days, without filling out and mailing any forms. It is not yet available from all insurers but the concept is catching on.

Peer recognition: There may be no better tool for employers than publicly recognizing a good employee. But when that recognition comes from a co-worker, it engages everyone in the workplace at a deeper level.

This recognition can come in many forms, but one effective tactic is having co-workers nominate and identify a co-worker for going above and beyond and doing something that made a difference for the entire organization. Simply being nominated is the reward, but if the employer throws in an inexpensive reward such as a gift card or a special parking place for a month, the recognition will have a lasting effect.

Monthly team lunch: People take lunch anyway but if you provide a lunch and bring in a guest speaker on health and wellness issues, employees will feel you care just a little more than expected. EAP service providers love to participate in on-site lunch-and-learn sessions and will often attend for free, depending on the speaker.

Gym membership: In a slow economy, every business can use a boost — so approach a local health club and negotiate a group rate for employees in return for an exclusive arrangement. Then, offer to pay the gym fee for anyone who wants to join. The program can be marketed to employees as the start of a new health and wellness program focused on their overall health and fitness. Create a contest around getting healthier and more employees will take ownership of their own health — and the employer’s claims experience will improve.

Preferred provider network: This may seem a little daunting but an insurance provider might already have a network of pre-selected service providers that, if used, will reduce costs of claims or out-of-pocket expenses for employees. Third-party providers can also provide discounted health services such as low-cost contact lenses renewal or vision care. Even small employers will have some degree of success in bartering an employee population for discounts on everything from lower fees on paramedical services to discounts on coffee from a local coffee shop.

Work from home day: If you do something long enough, things can get stale, even for the most engaged employee. If allowed to work from home periodically, they may not only be more productive — they might be more creative, too. On top of delivering the goods, they also get to spend the day in a less rigid environment, which makes them feel appreciated and trustworthy.

Flexible hours: Giving everyone flexible work hours doesn’t work in every workplace but, when it does, it can have a long-lasting impact on employee satisfaction, particularly if key team members have a long commute to the workplace or have to deal with child-care issues.

Anniversaries or birthdays: Everyone does this routinely when it comes to family and friends, but often draw the line at employees. Why? The feel-good factor is just too high to ignore and the cost is negligible. Arrange for cookies or cupcakes to recognize a birthday and let the honoree roam around the building to share the stash of pastries with co-workers.

This list is not exhaustive by any means. Effective employee rewards can also include monthly on-site visits by a masseuse, monthly potluck lunches, a day off with pay, a staff newsletter, a casual dress day other than Friday, a handwritten thank-you note from the boss or a few hours of company time to spend at a favourite charity.

Just remember to make the reward measurable, fair and consistent. Rewards and recognition can make the difference in retaining and attracting motivated, highly skilled employees while avoiding the costs of finding and training new employees.

Greg Pallone is president of TRG Group Benefits & Pensions in Vancouver. He can be reached at (604) 714-4442 or [email protected]. For more information, visit

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