Employee Benefits in Uncertain Times
With the second wave of COVID-19 hitting Canada hard, life feels uncertain. For small business owners, the future may seem uncertain. When operating in unprecedented conditions, your employee benefits are just one more thing that you may be uncertain about. Can you afford them? Should you get rid of them to cut costs? What’s the best move for you and your company?
Employee Benefits by the Numbers
The Conference Board of Canada has done research on how COVID-19 is affecting group benefits. Early on in the pandemic, their research showed that 68% of companies were not planning on making any changes to their employee benefits plans. The ones that were making changes weren’t necessarily reducing benefits. Instead they were tweaking their benefit plans to include services that may not have seemed important before (for example, virtual healthcare).
The Conference Board also found that, among companies who had laid off employees, almost 70% were continuing to provide employee benefits to laid-off workers.
It’s reassuring to know that most companies recognize that employee benefits are important, and that simply taking them away is not the right answer.
Remember Why You’re Providing Benefits
Sponsoring an employee benefits plan is a big commitment, and you had some good reasons to provide benefits in the first place. Now in these uncertain times, you may be wondering if you still have good reasons to sponsor a plan, given the financial burdens you may be facing. So let’s look at some common reasons for sponsoring an employee benefits plan and whether they are still valid now.
- Support employees – For many employers, one of their primary objectives in sponsoring employee benefits is to support their employees. They want to support both the physical and mental health of employees so that they are happy and productive. In these uncertain times, is supporting employees still a valid reason for sponsoring employee benefits? Absolutely! Now more than ever, you want your employees to have the resources they need to be healthy and productive.
- Recruitment and Retention – Attracting new employees and retaining existing employees is another common goal behind sponsoring an employee benefits plan. In these uncertain times, is recruitment and retention still a valid reason for sponsoring benefits? Yes. For some companies, the pandemic has actually meant a boom in business (think online resource providers) and attracting new employees is very important. But even if you are not one of those businesses, employee retention is still very important. You have already made a significant investment in your employees by training them in their roles. It’s both costly and disruptive to lose good employees and then have to recruit and train replacements. Therefore, employee benefits as a recruitment and retention strategy is still a good one.
- Tax Deductible Business Expense – Although not the primary objective for most business owners, the fact that employee benefits are a tax-deductible business expense is often a contributing factor for sponsoring a plan. In these uncertain times, is this still a valid reason for sponsoring employee benefits? Yes. However the pandemic is affecting your business, a tax-deductible business expense is still welcome.
Provide the Right Benefits
It’s pretty clear that regardless of how the pandemic is affecting your business, there are still many good reasons to sponsor an employee benefits plan. However, that doesn’t mean that you should continue with the status quo, with no changes to your plan.
It’s important to work with your benefits provider to ensure that you’re providing the right employee benefits, for right now. The pandemic and its effect on your business may necessitate some changes. Your plan may need to be adjusted to fit within your current budget, or it may need to be adjusted to include benefits that are especially relevant now.
One benefit that is especially relevant right now is virtual healthcare. Since the start of the pandemic, a common change to employee benefit plans is the addition of virtual healthcare. This is an invaluable tool for employees to access healthcare while respecting physical distancing guidelines.
Another in-demand benefit is access to an employee and family assistance plan (EFAP). An EFAP provides counselling and support, something that many people need when dealing with the stress and uncertainty of the pandemic.
Keep the Lines of Communication Open
The situation with COVID-19 is fluid. Guidelines and restrictions are constantly changing, and this necessitates changes to your business. During these uncertain times, it’s important to keep the lines of communication open. Let your employee benefits provider know how things are going so they can help adjust your plan or suggest options if you are facing financial challenges.
Keep the lines of communication open with employees as well. Let them know what resources are available to them and listen to what benefits or resources to which they need access.
Good Advice is Key
These are uncertain times, but you shouldn’t feel uncertain about your employee benefits plan. The right provider will work with you to provide a plan that works for you and your business, despite challenging circumstances. Review your options with one of our licensed advisors on the phone, or contact us for a comparison quote.