By Dan Eisner

Is 2007 such a distant memory – record low unemployment and shortages of key skills?  Perhaps we forgot a bit about those times given the uncertainty experienced during the subsequent years.  However, the economy has strengthened quite a bit with unemployment rates now below eight per cent and total employment in Canada at pre-recession levels.  As well, the demographics and underlying needs of the workforce continue to change with baby boomers getting closer to retirement (or not), Gen-Xers balancing the needs of their children and their aging parents, and more Gen-Yers leaving school and entering the labour market.  The needs of today’s workforce vary significantly and their expectations of their employers vary as much.

Human resource professionals are focused on addressing these challenges, which are becoming increasingly complex, but why are many of the solutions available in the market somewhat stale or limited?  In particular, to respond to the different needs and desires of a diverse (and increasingly scarce) workforce, many organizations consider a “flexible benefits” program, but have preconceptions when hearing these words – such as, annual enrolment requirements, costly communications exercise, confusing price tags and credits, lack of changes in employee choices, etc. – and abandon any further consideration of a flexible benefits program.

But why do organizations feel this way and simply accept these preconceptions?  And why do they often try to replicate the current plan in one of the flex plan options, or simply replicate someone else’s flex plan in the market? This does not address the specific need to target the needs of your current and future workforce.

In spite of improvements in the available administration tools and systems, the prevalence of broad-based flex plans has not changed significantly in a number of years.  While Canada’s adoption of flex plans has been stagnant, the adoption of similar plans around the world continues to increase – does it make sense that “emerging markets” are providing more options to employees than Western markets where the flex concept originated?  While the types of benefits being added may be different, philosophically what is it that is motivating the rest of the world and not us?

So, is there a better way?  Philosophically I believe so but we need to move away from focusing on flexible benefits, as currently conceived and perceived, and look at a more fundamental concept – employee choice, and not just more choice but more meaningful choice that meets diverse needs.  We need to break away from those concepts around flex that have dominated us for the past 25 years and set a new tone going forward.  Most importantly, we need to stay away from the available “commodity” of flex – those plans that represent all the preconceptions we may have.

Organizations need to be bold and visionary.  Move beyond any preconceived restrictions imposed by the market – both from the insurance industry, and consultants and advisors.  Gather the broader human resources team and operational representatives and do some brainstorming.  Identify current issues, put them into context, prioritize them, develop some initial thoughts around potential solutions, and set some timelines for next steps.  Do not be surprised if the ideal solution is not entirely achievable right now – where else in your organization do you secure immediate solutions for other business issues?  Instead, be realistic and consider two to three year timeframes for implementing the solutions, and focus initially on some low-hanging fruit to ensure there is a sense of short-term success.

Employees want and need more meaningful choice in their employment arrangement rather than just the old preconceptions around flexibility, and the tightening labour market will put further pressure on employers to provide this sooner rather than later.  Employee choice is an issue looking for a solution but we need to turn things around because traditional flexible benefits approaches can be more like a solution looking for an issue.  We need to turn things around and build an employment proposition that is relevant to our specific workforce issues.  We need to take a long term perspective and look for continual improvement.  Most importantly, we need to stop trying to drive the proverbial square peg into the round hole.

Dan Eisner will be co-presenting Right People – Right Places – Right Rewards at BC HRMA’s 50^th Annual Conference and Tradeshow in Vancouver on April 25-27, 2012. For more information, please visit www.bchrma.org/conf2012.

Dan Eisner is a senior consultant with Mercer’s Health & Benefits business in Western Canada. Using his unique skills and experience both as a Chartered Accountant and a human resources professional, he works with organizations to challenge the status quo.  He also helps facilitate a more effective dialogue between HR and finance to ensure that benefits solutions are sustainable, predictable and relevant.