Benefits that provide additional insurance most popular
In a global survey, Canadians are the only ones who chose additional paid time off as their most preferred benefit.
A salary increase was the second best benefit offering listed in the survey, while all other markets chose it as number one, found the Mercer survey of 10,400 workers (including 1,033 private sector Canadian respondents) in 10 key markets around the world.
“Employers worldwide are asking their employees to make more and more decisions for themselves when it comes to their benefit programs,” said Brian Lindenberg, senior partner at Mercer’s health and benefits business. “Canadian employees have shown that they value more time off and increased pay in the current stress-filled economic environment, which is understandable, but there are other benefits that have the potential to create more income protection through health benefits and income replacement through retirement and savings vehicles. This challenge puts even more pressure on employers to deeply understand and communicate the value of various benefits to their employees so they can make smart choices.”
When asked to rank the kind of benefits they are willing to pay for themselves — often referred to as “voluntary” or “flexible” benefits — responses reflected a broad split between markets. In countries such as Canada, in which a wider range of health benefits are provided publicly, benefits that provide additional insurance are the most popular.
In countries such as Brazil and China, where health benefits are not as accessible, offerings such as additional retirement/savings rank highly, found Making Smart Benefit Choices. In some countries such as Ireland and Italy, where the state is the primary provider of health care, supplemental private medical insurance is popular as a voluntary or flexible benefit.
“More and more employers are under pressure to offer a broader range of benefits to their employees,” said Lindenberg. “Reasons range from gaps in the Canadian health-care system to competing firms making creative and innovative benefits available. However, it is increasingly difficult for employers to simply add core benefits with the costs of these benefits outpacing inflation. Voluntary or flexible benefit offerings can often bridge this gap while empowering employees to chose benefits that match their particular needs and lifestyles.”
The top three benefits Canadian employees are willing to pay for are auto, home and critical illness insurance, found the survey. However, critical illness insurance, supplemental life insurance and long-term care insurance had the broadest appeal to older employees in Canada while younger Canadians preferred pet insurance and concierge services.
Out-of-country medical coverage is very popular among employees making more than $150,000 per year and young singles living with their parents, found Mercer. Also popular among young, single Canadian employees is lifestyle support such as weight-loss programs, smoking cessation and fitness programs.
“The voluntary benefits market is broad and increasingly more accessible and employees are indicating that they are willing to shoulder some of the costs of benefits that meet their specific needs,” said Lindenberg. “We can now see clearly that these benefits must be customized by industry and employee demographics.”
Canadian employees are also concerned about retirement readiness, with 68 per cent feeling very or fairly concerned about retirement, a concern that was reflected across the globe. This concern is well-founded, said Mercer, as 70 per cent of Canadians are saving 10 per cent or less of their total compensation towards retirement. In markets outside of Asia, this number rises to about 75 per cent.
"Employers need to enhance the perceived value of the benefits they offer to employees to ensure the investments they make in these programs generate more strategic, long-term advantages,” said Sarah Fitzmaurice, principal in Mercer’s retirement, risk and finance business. “Employers taking simple steps to help employees understand and plan for their retirement needs can expect a return in the form of enhanced engagement, loyalty and motivation."