Control benefit costs.

With businesses trying to attract the best skilled labour possible, benefits are an important tool to help companies attract and retain its employees.

However, because medical benefits, sick time, pension plans and absenteeism costs are continually increasing for businesses, many human resource professionals are seeking solutions to control and contain costs. For some firms, benefit costs have increased from 30 per cent to 47 per cent of the total compensation package over the last few years.

"Benefits packages are important for recruiting," says Rachel Pineault, a manager of human resources with the Cochrane District Social Services Administration Board. "If you do not put forward an attractive, user-friendly benefit plan, it is very difficult to recruit people."

She says next to salaries, benefits are the most important factor to prospective employees. Medical coverage, is particularly important for workers and their families in Northern Ontario, she says.

Pineault says HR professionals need to keep an eye on benefit costs to ensure they stay within reasonable amounts. A basic way to do this is to look at plans which include preventative health management strategies, she says.

"What happens is that people tend not to look after their health until it is an emergency situation, and because it is acute care and not preventative care, the benefit program takes a hard hit," says Pineault.

Making sure benefits plans have components that include preventative medicine so employees are not waiting until a problem gets serious before seeing a doctor, is important, she adds.

"If I have a shoulder strain, and go see a chiropractor or a massage therapist, I don't take much time off work," she explains. "But, if I don't do this, I end up with a larger problem, and the costs increase to perhaps include hospital stays, rehabilitation, paramedical costs, and even short or long-term disability costs."

She also says to keep benefit costs down, HR professionals should also look for plans that offer tax savings and can be underwritten to get immediate savings. They should also take a look at their plan design every now and then to ensure unnecessary procedures or medical costs are not sneaking past each time OHIP downloads more services to the private sector.

Doug Turner agrees "it is important to get a handle on costs now" before they get out of control.

The president of the Timmins chapter of HRPAO, and superintendent of HR at Falconbridge, says it is important for human resource professionals to review plan designs and costs for the present and the future benefit of their employer and the employees. Otherwise, these costs may become a huge burden for the employer to carry. Key to achieving this, he explains, is communicating with the employees to suited to his or her needs and can be easily co-ordinated with the plan of a working spouse," he says.

Pineault says flex benefit plans are excellent tools to control costs, but adds, from an "HR perspective, they are hard to communicate with the employees."

She agrees with Turner that it is necessary to ensure employees are aware of the costs associated with their benefit plans.

"The general population believe benefits are a right, but what happens is people don't think twice about it," she explains. "They place the charge on their card, but don't get the bill, so they have no idea how much it costs."

Turner adds once the employees understand the general costs associated with their benefits, their decisions become more cost-effective, and in regard to flex benefits can select options that are more specific to their personal and family needs. Employees may view a change in benefit design as a take away, yet the change is intended to provide comparable benefit, control costs, and ensure adequate plan coverage for future employees.

By Dean Lisk

For Northern Ontario Business