Ensuring Your Benefits Plan Meets Younger Workers’ Needs

Amid sharpening focus on mental health and well-being, the onus is now on employers to get creative

Ensuring Your Benefits Plan Meets Younger Workers’ Needs

The workplace has experienced a seismic shift in the aftermath of pandemic disruptions and the rise of hybrid work environments, leading to trends like the ‘great resignation’ or more recently, ‘quiet quitting.’ Fuelled by the wake-up call of a global health crisis that challenged the status quo and placed a spotlight on mental health ‒ both in the individual and broader sense ‒ employers are facing the need for more support programs as workers demand better mental health benefits.

The picture is clear: if employers are seeking to attract and retain today’s talent, they need to meet their expectations with plans that go well beyond basic, traditional health benefits. Employees now look for a broader range of benefits that can be tailored to meet their evolving needs and lifestyles, particularly among those starting out in the workforce.

As customized and flexible benefits packages become an increasingly valued component of overall compensation, businesses that don’t have competitive offerings risk losing their employees to companies that do or failing to attract top talent. In a recent RBC Insurance survey, we found that nearly three- quarters of young Canadians aged 18 to 34 (73 per cent) and 35 to 44 (69 per cent) are significantly more likely to leave their current employer for another that is offering what they would consider to be better benefits. Just as the pandemic brought increased awareness to mental health issues, it also highlighted the challenges of accessing public healthcare, as well as the gaps in many companies’ coverage.

These findings are supported by labour market trends. RBC Economics has found demand for workers is still very high with job postings that are still 65 per cent above pre-pandemic levels. There are few unemployed Canadians available to fill these roles, creating a ‘buyer’s market’ for those looking to change jobs. In addition, the Bank of Canada’s ‘Survey of Consumer Expectations’ revealed the likelihood of a worker voluntarily leaving a job is increasing as younger Canadians reported lower levels of overall well-being and mental and physical health year-over-year since 2019.

Top Three Features Employers Should Provide

In addition to being a tool for attracting employees, well-structured, competitive group benefits enable employers to boost productivity and engagement by ensuring workers have access to optimal health support, while alleviating common stressors such as healthcare costs and finances. While every employer’s package can be unique, with different levels of coverage for prescription drugs and dental care, mental health support is no longer a ‘nice to have,’ but a key component for any plan.

In determining what makes one benefits plan better than another, we found employees’ top three desired features of a group benefits plan were support for mental health which tops the list for the great majority (88 per cent), followed by a health spending accounts (80 per cent) and options to add additional coverage (79 per cent) to better meet their personal or financial objectives. This is also in line with how workers are feeling, with 61 per cent reporting their overall well-being as good or excellent, down three points since 2021, and only 58 per cent reporting their mental health as good or excellent, down five points since 2021.

Designing Benefits Plans to Attract Younger Workers

Most plans vary in terms of who is covered (individual or family), the contribution amount made by the employee/employer, coverage limits, and the types of services covered. Employers drive the plan design based on their budget, culture, and business strategy and have a range of options available to create flexible packages that are attractive to younger workers, giving them the choice they desire.

For example, health or wellness spending accounts are a cost-effective way to provide access to additional benefits, while giving employees greater flexibility to choose and prioritize the health and wellness services they want. Virtual tools and digitally enabled services, such as online pharmacies or even virtual orthodontics, also provide flexibility and convenience, while removing accessibility barriers.

When it comes to supporting mental health, employers should consider a broad range of care options to support the unique and changing needs of their employees. For example, employee assistance programs (EAPs) are a valuable resource that can help employees cope with a number of issues affecting their well-being. For longer term mental health support, a variety of in-person or virtual solutions can help provide easy access to quality self-guided or therapist-led sessions. When employers offer a wide range of services, employees are able to access the best support for their physical and mental health, no matter where they are in the health continuum.

Employers can also get creative with other types of benefits such as flexible workplace arrangements (hours of work, remote, or hybrid), extra personal days, or vacation time. Take a look at your policies and practices to ensure your benefits are aligned with diversity, equity, and inclusion which are also of great importance to younger workers. For example, we recently introduced a gender affirmation benefit to support the transition journey by reimbursing expenses that are above what’s typically covered through provincial health plans. It’s important to understand your employees’ needs and priorities and ensure offerings that support your workplace culture and business strategy.

Benefits Plans Make a Difference

Prioritizing employee mental health and well-being is critical. The return on investment comes back to employers by way of increased employee engagement and productivity, less absenteeism, more loyalty, and a better reputation as an employer of choice among prospective talent. This is supported by the survey results, which show that Canadians with employer-provided benefits are significantly more likely to be more satisfied across a range of lifestyle factors, rating them higher than those without benefits. They rate higher levels of job satisfaction (64 per cent, six points higher), overall well-being (64 per cent, 10 points higher), physical health (62 per cent, eight points higher), mental health (60 per cent, seven points higher), and financial health (55 per cent, 17 points higher) higher than those without benefits.

Designing an Attractive Benefits Plan

The following are some practical steps employers can take to ensure they’re designing benefits plans that are meeting the needs of their younger employees now, and in future:

  • Gather feedback internally and research the latest health and wellness trends ‒ Look for resources from your insurance provider to help you. For example, RBC Insurance Group Benefit Solutions offers a workplace wellness toolkit with a framework for assessing the well-being needs of employees and creating a wellness strategy that is tailored to the unique goals of the organization, at no additional cost.
  • Ensure your plan is competitive and aligned with best practices and industry trends ‒ One way to do this is to offer flexible coverage and a health or wellness spending account which allows employees to customize their plans to meet their individual needs. This will help with retention and recruitment efforts. Review your plan regularly to ensure it evolves with changing best practices, regulations and employee requirements.
  • Educate employees and increase awareness about the existing benefits plan and what’s included ‒ Often, they may not be aware of the coverage that’s already available to them and how to access it, so it’s important to ensure they understand their plan and how to utilize it.

Explain the value of the program to the employees and be the first to champion the importance of mental health and a supportive culture.

Julie Gaudry is the Head of the Group Life and Health Business at RBC Life Insurance.