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In case you missed it - The Most Significant Employee Benefits Plan Issue: It's Not What You Think

The vast majority of benefits related articles and conversations these days seem to be focused on rising costs. Brian Lindenberg, Senior Partner at Mercer believes cost is the wrong conversation and that benefits should be viewed as an investment not a cost. So, what is the right conversation? Brian says, “The changing profile of the workforce is the most significant issue impacting employee benefits programs today.”

Both Brian and co-presenter at last Thursday’s sold out lunch session, Stephen Diotte, VP, Human Resources, Information Technology and Corporate Services, MEG Energy believe that plan sponsors need to be ready for the workforce of the future in designing benefits programs. “Most plan sponsors focus on the short-term and do not focus on changing demographics,” said Brian.

The workforce and benefits programs will look much different in the future. Firstly, the average age of the workforce will be much older. In the next 15 years the average age will increase from 39 today to 45. This alone will increase health costs by almost 50%. Other consequences of an aging workforce will be an increase in incidence and duration of disability claims. The future will bring labour shortages, which Alberta is already experiencing in some key roles. In order to meet this demand, labour market growth will need to be satisfied through an immigrant population that has different values. One example is that some ethnic groups place little value on life insurance but are often financially responsible for their parents and other extended family. Benefit programs will need to evolve to satisfy the needs and values of this future workforce.

Employees entering the workforce today may have as many as 20 careers, so benefits programs will need to be designed to attract employees that may only be around for two to three years. In a world where almost everything is customizable and available at your fingertips, there will be a greater focus on the individual and “technology will shape how we deliver benefits.” People expect everything now, so employees will
expect reduced wait times, which may create an increased demand to cover healthcare not being provided by the public system on a timely basis.

While Brian gave us his consulting perspective on the future of benefits programs, Stephen Diotte offered us a glimpse of a progressive plan sponsor’s point of view. MEG Energy has aggressive growth plans, which will require the company to offer innovative benefits in order to meet their future workforce requirements.

He said that “40% of the oil and gas workforce in Alberta has been in their current job for less than two years.” The reason he offers is that oil and gas companies have failed at delivering on promises made during recruitment in terms of the employee experience. Stephen feels that MEG has developed an edge here. They have an airstrip at their primary Christina Lake worksite and offer seven days on, seven days off work rotations. He also said the food quality and overall experience at their work camps are excellent, which has been echoed by comments from many employees who have experienced camps at other employers.

MEG has its sights firmly focused on the future and is preparing by doing a lot of workforce planning and believes they are ahead of the curve from this perspective. However, in order to meet future growth MEG has already started to build a solid foundation. Some of the benefits that are most valued by younger employees entering the workforce are professional development and work-life balance. MEG currently has benefits in place to attract this demographic with comprehensive professional development benefits, sunny Fridays (i.e., every second Friday the office is closed) and business casual dress. On Fridays when the office is open, MEG uses bacon - yes bacon, to bring employees together and communicate what the company is doing in certain areas through its “MEG Connects” company breakfasts.

Stephen says that when considering changes to benefits programs, plan sponsors need to look at data in context of three things: what’s happening today; what’s happening outside your organization and what’s likely to happen in the future. I think that’s solid advice.

Don’t miss our next lunch session on Thursday April 17, titled: Implementation of Bill 10 – Alberta’s New Pension Regulations Are (almost) Here. This session will be presented by Paul Owens, Deputy Superintendent of Pensions and David Mulyk, Senior Manager, Risk Management, both of Alberta Treasury Board and Finance; and Michael Wolpert, Partner, Lawson Lundell LLP. Click here for more information

- Kenneth MacDonald

You can also read this update and view the session presentation on our Blog

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