2022 Consultants Report: How consultants are helping plan sponsors grapple with mega-trends for future of work

Consultants say they’re helping plan sponsors address a number of trends that are reshaping the future of work, including a tightened labour market, demand for flexible benefits and hybrid work and an urgent need to address staff burnout. That has translated into a surge in employee feedback sessions and pulse surveys to gauge workers’ needs and wants.

Read: 2021 Consultants Report: Pandemic changing plan sponsor, consultant relationships

“Employees have changed over the last two years and, as a result, are looking for something different from their employer,” says Allison Griffiths, principal and Toronto career business leader at Mercer Canada. “The people you knew two years ago are not the people you have as part of your organization today.”

Solving the supply and demand equation

The tight labour market has been looming large in employers’ minds, say consultants. There were more than a million job vacancies in March — an increase of almost 23 per cent month over month and a whopping 61 per cent from the previous year. The job vacancy rate reached a record high of 5.9 per cent that month, according to data from Statistics Canada.

“The No. 1 thing on [plan sponsors’] minds right now is. . . [solving] that supply and demand challenge,” says Griffiths. “How can they get the talent they need? How can they retain the talent they have and ensure employees are productive and engaged at work?”

This trend is worrying small- and medium-sized employers more than most, says Leanne Bayley, benefits and pension advisor at Selectpath Benefits Financial Inc., noting the pandemic has created the opportunity for employees to work remotely for big-city employers while benefiting from the lower cost of living in smaller markets. While the trend has helped to expand some companies’ hiring reaches, it may disadvantage smaller employers.

Read: Thomson Reuters expanding remote work policy, sabbatical program

Griffiths says this moment is prompting employers to revise and redefine their employee value proposition, including their benefits and total rewards package, approach to flexible working, culture, purpose, diversity and how they help employees develop their careers within the company. “We need to have a reset on this. What we had down on paper two years ago isn’t cutting it today.”

More flexible benefits plans will play a big role in that value proposition. In the first two years of the pandemic, employers introduced more choice for employees — in the form of health-care spending accounts and wellness accounts with a broad list of approved expenses, as well as other new offerings like fertility, adoption and gender affirmation benefits — and they proved their value as a way to address a wide range of employee needs.

Plan sponsors are planning to hold onto these benefits to differentiate themselves in the war for talent, says Sarah Beech, central Canada area president at Arthur J. Gallagher & Co. “Having those kinds of non-traditional benefits offerings are part and parcel of what it means to be a part of that organization — it’s not just about getting a paycheque. Employers are turning to their total rewards programs as part of why someone should want to work with [them].”

Read: Employers see retirement benefits as top attraction, retention tool: survey

The talent shortage is also prompting employers to consider their retirement savings offerings, says Bayley, noting she’s seen a significant increase in interest in adding to or enhancing a group retirement or savings plan. “Smaller employers that may have considered a group [registered retirement savings plan] a nice-to-have are now feeling pressured to include it as a must-have.”

Jason Vary, president of Actuarial Solutions Inc., says he believes the talent shortage is driving interest in multi-employer pension plans like the Colleges of Applied Arts and Technology’s DBplus and others. He’s even taken calls from plan sponsors with closed defined benefit plans that are considering reopening them to appeal to current and future employees. “Employers are competing fiercely for talent, perhaps a DB or a DB-like plan will be a selling feature.”

While Vary adds he doesn’t expect to see DB membership return to its heyday, he notes “people are realizing [DB plans] can be something that attracts and retains and employees are keen to be in one.”

Mental health remains centre stage

After living through a pandemic for two years, employee burnout and mental health is front of mind for employers.

According to a 2022 Gallagher survey, 67 per cent of employers listed burnout and mental-health challenges as their top employee concerns. They’re right to be worried: Lifeworks Inc.’s monthly mental-health index ranked Canadians’ mental-health score as negative 10 in April, a half-point improvement from the month before but still 10 points below the pre-2020 benchmark. It also found Canadians’ work productivity and isolation scores declined in April.

Read: 45% of Canadians say pandemic continues to impact mental health: survey

Plan sponsors have responded to these challenges by re-examining their coverage for mental health to make it inclusive of other professionals — such as clinical counsellors and psychotherapists — or upping the annual maximums, says Ken Macdonald, associate vice-president of national accounts at Hub International Ltd. Virtual care platforms have also helped address accessibility challenges.

Paula Allen, global leader and senior vice-president of research and total well-being at LifeWorks, says employers have also been working with their employee assistance plan providers to offer more robust services within the program, such as assistance with burnout, trauma and support for working parents.

After quickly adding services to support employees in crisis mode, employers are now looking to streamline the experience by making these supports easier to access and creating more of a journey with linkages between services, she adds. Employers have also looked to address mental well-being through initiatives that fall outside of the benefits plan, says Griffiths, citing options like no-meeting or video-off days and having leaders speak candidly about their own mental-health challenges to reduce stigma.

KPMG in Canada is taking a novel approach to employee well-being this year with an initiative that provides employees with long weekends every weekend in July and August. The program was the result of the company’s listening strategy, which asked employees what they value most regarding benefits and wellness initiatives.

Read: KPMG is turning every weekend into a long weekend for employees this summer

“What became clear to us was [employees] really value time off . . . to do what they want to do with friends and family,” says Emily Brine, the organization’s managing director of firm operations, talent and culture. The program follows last year’s summer initiative, which granted employees six additional paid days off during the summer, and its winter program, which provided five extra days off around the holidays.

The program is in line with KPMG in Canada’s “continually evolving” approach to wellness, which is meant to give staff the flexibility to meet their varied well-being needs, says Brine, noting it also offers $2,000 in annual mental-health coverage, video-free Fridays and meetings-free Wednesday afternoons.

The organization conducted pulse surveys throughout the pandemic on employees’ mental health and energy levels. While scores around employees’ energy to sustain their workload were quite low, says Brine, they’ve started trending upward in the past six to eight months. “Part of that has been people using the benefits we’ve offered and . . . we do think the additional time off did help with that.”

The return-to-office tug of war

While the Omicron wave threw a wrench in many employers’ return-to-office planning, dress pants and blazers are officially back — at least for a couple of days a week.

But being asked to go back to the office hasn’t sat right with many employees, who’ve spent two years proving they could be productive at home. That push-pull has been animating many discussions with plan sponsors, say consultants.

“We’re in a pretty vulnerable place right now,” says Allen. “I think it is actually awkward because we’re doing this little dance around how we move forward and people are entrenched in their positions because of this need for returning to some sense of control. Employers had a fair bit of control before the pandemic and employees had it during — who’s going to have it going forward?”

Read: What are the legal considerations for employers returning to onsite working?

Employers must be intentional and clear about the reasons they’re asking employees to return to the office, such as fostering culture, collaboration and team-building or for specific events like team meetings and town halls, says Beech.

“I talk to a lot of leaders and there’s a desire to bring back that sense of community, but looking for reasons and a sense of purpose. Employees aren’t really [open to], ‘You have to, you just have to.’ Why? What are [they] going to get out of it? The organizations that are doing it well are talking about culture, learning and development and relationship building that happens in an office environment.”

There are more opportunities for employers to provide flexibility than through a hybrid work schedule that specifies number of days per week in the office, notes Allen. According to LifeWorks’ research, employees consider flexible work hours just as or more important than how many days they spend in the office. She gave an example of a parent who might prefer to work mornings in the office and afternoons at home to be present for their children returning from school.

“Employers have certain needs and reasons why people should work a certain way and they need to be transparent about that. Employees have certain needs too and, if we continue that conversation, we’ll have a reasonable solution.”

Read: KPMG allowing employees to work remotely from another province, country

KPMG in Canada launched a remote work and travel program in May that will allow employees to work up to eight weeks within Canada outside of their home province and four weeks in an international location like the Bahamas, Bermuda, Brazil, Croatia, the Cayman Islands, France (if they’re European Union citizens) or Mexico. Employees who are U.S. citizens are also eligible to work in Florida for four weeks.

The program, which requires participating staff to be available for Canadian office hours, also came out of listening sessions with employees, says Brine. “We’re super proud of our opportunities to work differently. It’s something that does help people’s mentality and overall wellness.”

KPMG in Canada also has flexible working policies and provides 50 hours of personal care time for unexpected personal commitments. “The approach that we’ve taken . . . is around flexibility and working where you’re most effective in order to meet our client, business and team needs,” she says.

“I think that’s extremely important as we go forward for that new generation of employees in Canada. We need to be flexible because people work differently and we need to respect that.”

Kelsey Rolfe is a Toronto-based freelance writer.