It’s crucial to attract and retain a quality team for your business’ success. Planning out your competitive compensation strategy involves more than setting out hourly or salary wages and complying with paid time-off requirements. That’s the starting point.
Now, how do you decide on the next steps of managing raises and employee health benefits? Here are some things to consider.
What is your compensation philosophy?
How you decide to pay your team is based on your business and budgeting goals. Are you facing industry-competitive challenges? Is it becoming easier or more difficult for you to get the talent you need?
Striking the right compensation strategy helps your business:
- attract and retain top talent with the in-demand career skills that can take your business to the next level.
- motivate employees to perform at high levels and exceed their goals
Total compensation includes not only the income levels your employees earn, but the benefits opportunities you offer too.
Offering health insurance goes well beyond physical health
In today’s challenging economy, every dollar can count for your employee and their household budget. That’s why you may assume that a raise in pay would be what your employees want most, but consider this:
Health benefits can have a greater impact on a household’s bottom-line
Getting an annual raise is good news – and bad news. Income tax must be paid on every extra dollar an employee earns – and extra dollars can even bump your employee into a higher income tax bracket. As a result, their net income after taxes isn’t quite the advantage you think are providing.
Basic health and dental coverage provided by you is usually non-taxable for your employees. These benefits are designed to support your workforce’s well-being, and the Canada Revenue Agency recognizes their importance.
If you only provide raises to your employees and not health insurance benefits, you are leaving them to pay for coverage themselves – and the raise may not cover the cost of their health insurance for a year.
BONUS: If your company pays the premiums for employees (who are not shareholders or related to shareholders), these premiums are deductible by your company.
Health benefits can offer higher dollar value
It is possible your team members will be faced with health challenges through the year – an accident or unexpected illness – and they may need to reach into their ‘after-tax’ pocket to pay for healthcare costs.
By providing health benefits instead of a raise, there can be a clear advantage when an employee can depend on many healthcare costs like prescription drugs, dental care and therapy – which can amount to not just hundreds but thousands of dollars each year — to be covered by their insurance. If you are providing family coverage, the plan can pay for healthcare costs for their spouse and children.
Your team will also appreciate the convenience of a pay-direct benefit card to present at participating pharmacies, dentists, massage and physiotherapists, psychologists, and more, so the plan is billed directly for covered costs. No need for them to pay out of pocket!
BONUS: By offering health insurance, you help remove the financial barrier of healthcare that employees may avoid, enabling them to better manage their physical and mental health hurdles – helping them to stay active and productive at work. They are more likely to take the time for preventative healthcare like going for regular dental check-ups and to manage their chronic illness by filling and following their prescription medications.
Health benefits provide access to health support not available elsewhere
The access and resources provided by health insurance help employees prioritize their healthcare.
Unless your employee is ‘connected’ to their health insurance, they may not access trusted online resources for health information that is up to date and accurate. Many health plans include interactive tools, health and wellness assessments, child and elder care resource locators and personalized content recommendations.
Many health plans include anytime access to virtual healthcare professionals and preferred pricing or free limited time access for nutritional coaching, smoking cessation as well as grief and loss legal advice and financial consultation.
Finally, employees may not realize that they need emergency medical travel insurance when they leave their home province on a trip – so they will value the emergency medical travel coverage included with health plans for their vacation coverage that protects their finances if the unexpected happens.
BONUS: Offering health benefits not only supports employees’ physical well-being but also contributes to a thriving workplace. Employees can feel that they are a valued member of your team. It’s an investment that pays off in terms of employee satisfaction, retention, and overall business success.
Raise your business advantage with health insurance
Health insurance can keep your employees healthier, happier. The good news is that health insurance may be more affordable than you realize.
At SBIS, we specialize in helping small business owners make the best possible decisions on what individual or small group health insurance plan will work best for your employees. Call us at 1-800-667-0429 or 416-601-0429 Monday to Friday, 8:45 a.m. to 4:45 p.m. ET or go online to discover small business health insurance options for yourself or click below for more information on SBIS health insurance plans that can work for you.
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