The latest Canadian jobs report shows that over 90% of new jobs created last year were in Alberta. Fueled primarily by the oil-patch, our low unemployment rate has produced a major challenge for farmers and small business owners when finding and keeping good employees.
Fortunately, not everyone wants to work in the oil-patch with the long hours and time away from family. But while running a farm equipment business in Grande Prairie, I still experienced the ongoing challenge of retaining employees when competing with other employers from the farming, mining, forestry, pulp, and oil and gas industries in the region.
Wages are the main reason your employees come to work every day, but good benefits are a major factor as well. Most small businesses can’t pass increasing salary overhead onto their customers. An aging work force presents an additional difficulty, with life, disability, health and dental plans facing ever increasing costs. So how do you provide competitive wages plus attractive benefits for keeping good employees?
Depending on the level of benefits a business can afford to provide to their employees, there is a wide range of health and dental programs from basic to gold-plated. Blue Cross and a multitude of insurance companies offer plans that can be suited to the individual needs of a business.
Private Health Services Plan
A cost-effective entry level plan is a Private Health Services Plan (PHSP). After a one-time setup fee, the business can purchase individual employees’ health related expenses up to a pre-determined annual limit. These plans are effectively a tax write-off for the company, and a non-taxable benefit to employees. Most prescriptions or treatments provided by recognized health professionals can be expensed. One big benefit of PHSPs is that they are a pay-as-you-go plan so there is no monthly premium.
Unincorporated businesses can claim up to $1,500 per employee and their spouse, plus $750 for each child. Incorporated businesses can claim between 10% and 20 % of T4 earnings. Different class limits can be set up for owners and/or employees depending on seniority or position.
Payroll Savings Plan
A payroll savings plan is another benefit employers can offer. These are deducted from employee’s paycheques, usually with matching employer contributions to a certain level. These can be deposited into TFSA or RRSP plans, and investment choices can range from short-term high interest savings accounts to aggressive growth funds. Most larger corporations have more sophisticated plans such as locked-in pension plans or employee profit sharing offerings. All have to be reviewed, both as to their cost and how much administrative time is involved to manage the particular plan. Some group savings plans are administered by the fund company and require minimal involvement by payroll staff.
More creative perks can be things such as advanced education opportunities, training for key employees, fitness club memberships, association dues or licensing costs. Even staff pizza lunches or birthday cakes can go a long way to build team moral and help cement employees to your business. Bonuses can work well as long as they don’t become expected. They need to be reachable and fair, and tied to something that the employee has control over.
I recommend that all employees have job descriptions and regular reviews, as it helps define what is expected from them, plus it provides them with benchmarks and targets for bonuses or promotions.
If you’re interested in providing an attractive and affordable benefit package for your employees, take the time to talk to a licensed life insurance broker.
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