How to “show them the money”
In Part 1 of the Employee Compensation and Rewards Series, we look at the elements of financial compensation … and we’re talking about more than salary!
Nearly three-quarters (73%) of workers believe competitive compensation and benefits are among the top five factors they look for in an employer.1 If you want to attract great people, you have to start with competitive salaries, but today’s top talent are looking for more. Compensation packages that go beyond base salary aren’t just for large blue chip firms, but can also help small and medium-sized businesses (SMBs) with recruitment and retention.
Here’s a look at the top financial benefits sought by employees:
Employer-sponsored retirement plans
Designed to replace some employment income upon retirement (and as a supplement to CPP benefits) plans include:
- Registered Pension Plan (RPP) – The most common retirement plan, offered to 38% of Canadian employees.2
- Group registered retirement savings plan (Group RRSPs) – Employees and employers contribute to a pooled RRSP – an attractive option for SMBs.
- Deferred profit-sharing plans (DPSPs) – Employees are offered financial reward based on employer year-end profit.
Group Health Benefits
Offering group benefits is linked to improved employee recruitment and retention.
Forty-seven percent of SMBs offer some type of benefits plan, with 22% of established companies providing retirement programs, while companies without benefits programs say retention and recruitment are top motivators for starting one.3
Group benefits can be tailored to suit business needs and budget, but we’ll cover this more in part two.
Performance or Annual Bonus
Whether tied to the attainment of specific goals, team performance, or a simple thank you, bonuses are commonplace in business. To be an effective motivator, employees need to understand what they need to do to qualify for bonuses.
While it’s true that money is a primary motivator in today’s workforce, you don’t have to simply bump up an employee’s salary to sweeten the pot and keep your talent engaged. Here are a few other financial incentives you could consider:
- Education or tuition reimbursement
- Sabbaticals after extended service
- Low interest loans
- Child care or elder care assistance
When considering compensation and benefit packages, don’t forget to consult with legal, tax, and compliance specialists before finalizing your program.
Read the next articles in this series for ideas that go beyond financial incentives.
How to “show them the money” (PDF version)
1. Financial Post, Better Compensation is back on top of Canadian employees’ wish list, 2013
2. Statistics Canada, Percentage of Labour force and employees covered by a registered pension plan (RPP), 2011
3. Manulife Financial, 2013 Manulife Financial Small Business Research Report, 2013
The information contained in this HR Tip Sheet is summary in nature and is intended to provide general guidance. It should not be viewed as a replacement for legal or professional advice.
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