Compensation and benefits for your workforce
In any type of job market, offering competitive compensation and benefits is crucial. Compensation and benefits packages can help boost employee motivation, productivity, and morale, while also helping you attract and retain top talent. A recent Hays survey found that 65 percent of Canadians are considering leaving their jobs due to pay dissatisfaction, highlighting a key point for business leaders: regularly benchmarking compensation and benefits is no longer optional. Employees now value work–life balance, wellness, and pay equity just as much as their salary. To stay ahead, organizations require a well-rounded employee benefits strategy and regular compensation reviews, or they risk losing employees to opportunities elsewhere.
What are compensation and benefits?
Offering competitive compensation and benefits packages is crucial for employee retention and can also help build resilience and drive engagement among workers.
- Compensation includes the financial rewards from work, such as salary, commissions, retirement savings contributions, monetary bonuses, and more.
- Benefits include any other employee incentives or perks, such as paid time off, health and dental benefits, and flexible work arrangements.
Both help employees improve work–life balance, subsidize important costs, and enhance overall wellness.
Developing a compensation and benefits strategy
Determine priorities and expectations
To develop an effective compensation and benefits strategy that promotes organizational success and employee satisfaction, you need to consider both your organization’s priorities and goals and your employees’ expectations. From an employer’s perspective, an effective strategy aligns with financial objectives, budget constraints, and long-term business aims. Using tools like our Compensation Strategy Questions Checklist can help define the specific value you intend to offer employees.
For tailored guidance, our Consulting Services can assess your current compensation program and help build an effective strategy. Your compensation and benefits strategy must also align with employee values. Gathering feedback through an Employee Benefits Satisfaction Survey can inform decisions by identifying what employees like, what they dislike, and what needs improvement in your current benefits offering. Staying informed about market trends and surveying your own employees is crucial for developing an effective strategy.
Get competitive with compensation and benefits
Employee compensation and benefits preferences often depend on demographics. Younger employees may value flexible work opportunities, while older employees may value retirement plans and comprehensive healthcare benefits. Since your organization covers these costs, prioritize benefits that are possible for your budget and offer the most value to employees. Employee preferences evolve, so regularly review and adjust your offerings to ensure they remain relevant to your workforce.
Establish pay transparency
Fair pay is the cornerstone of any competitive compensation package. It ensures an employee’s compensation is fair, appropriate, and aligned with the value of their work. Fair pay also ensures employees are not paid unjustly due to discrimination, such as a woman being compensated less than a man in the same role or in a role of equal value. Creating a Pay Transparency Policy also demonstrates your commitment to a fair and equitable workplace by addressing and eliminating any pay discrepancies in your organization. Employees appreciate pay transparency because they want to understand how their compensation is calculated and how it compares to colleagues in similar roles. Implementing a policy keeps your business accountable and helps establish realistic expectations for your team.
Review wage disparity
There are several reasons employees with the same job may be paid differently, including seniority, merit, piecework, or other differences not due to gender; however, employers must be aware that any wage disparity related to prohibited grounds of discrimination is illegal. Even if wage disparities are legal, ask yourself whether they’re fair. And would your employees agree? Does compensation align with industry standards? Unexplained pay gaps can lead to distrust, low motivation, and resentment. Longtime employees may feel frustrated if they receive less than new hires despite their years of service. While hiring new talent at competitive wages is important, ensure fair and equitable pay for your existing team first.
Some popular benefits and perks
Even when you achieve fair and competitive compensation for your employees, compensation alone won’t guarantee employee satisfaction. Instead, attractive benefits and perks become increasingly important to an employee and can meet more needs because they offer what money alone can’t buy. A diverse portfolio of perks may also pique the interest of a wider range of employees or candidates.
Flexible work arrangements (such as remote work, hybrid work options, or flexible hours) have become important for employees, so more employers are implementing flexible work policies to meet their employees’ needs. This flexibility can reduce stress and burnout and increase work–life balance, allowing employees to better manage their personal and professional responsibilities.
Health and wellness benefits for employees
Health and wellness benefits have also become increasingly important to employees, and with 91 percent of employers offering extended healthcare benefits to employees, companies can’t overlook this popular benefit if they want to remain competitive. If your organization hasn’t already, consider implementing a Workplace Mental Health Policy and offering employee assistance programs (EAPs), paid wellness days, and mental health training. Supporting employee mental health decreases burnout and increases productivity: a benefit for both employees and the business. Even simple steps like offering unique wellness perks, such as healthy lunches and snacks, onsite gyms, fitness reimbursements, or wellness challenges, can help set your company apart from the competition.
Disconnecting from work
Employees also value paid time off and seek employers who respect their need to fully disconnect from work responsibilities. Review your time off policy to ensure it provides adequate paid vacation and sick days so employees can rest and recharge when necessary. Employees are more satisfied, engaged, and productive when they can take breaks from work and not worry about lost income, and a strong time off policy shows that an employer cares about the wellbeing of its employees.
Insights from our experts: Compensation and benefits are more than just perks and a paycheque.
To be a great representative for both the company and employees, HR professionals should demonstrate empathy in everything they do: when attracting top talent, when delivering an exceptional work experience, and when compensating their employees. Developing a compensation and benefits strategy is a necessity for employers that want to remain competitive and meet the evolving needs of the workplace. By regularly reviewing and adjusting compensation and benefits, considering employee feedback, and staying current with market trends, employers can ensure a more engaged, productive, and loyal workforce. An updated compensation and benefits package may just be the biggest “thank you” your organization can give.
Need help building a competitive compensation and benefits strategy?
Designed for Canadian businesses, our innovative services and support simplify employee management with HR tools that help business leaders succeed. Our HR and health and safety solutions combine innovative HR software with live, expert advice to meet the unique needs of your workforce. Create a compensation and benefits strategy that drives employee retention and trust with our Canadian-made software and support. With our conveniently priced packages, you’ll have access to:
- HR content and templates: Access hundreds of up-to-date HR documents, award-winning HR software, and immersive online training courses—all managed through our secure, user-friendly HRIS, Atlas.
- A team of experienced HR consultants: Get help before adjusting your organization’s compensation strategy, meeting new legislative obligations, updating policies, and more. Our team of HR consultants has supported hundreds of businesses with completing time-sensitive projects while ensuring compliance standards across Canada.
- Real-time expert advice when you need it most: Our HR support and health and safety advice services connect you with experts ready to provide trusted guidance that’s helped thousands of organizations address challenges and maintain compliance.
For a live look at our services and support in action, connect with one of our experts today!