A $40K raise? A third of Canadians would choose something else

Whether Canadian workers get a pay rise in 2024 and how much, is still uncertain, but there may be something more valuable to workers than dollars in their pockets.

While businesses are planning a slightly reduced overall compensation budget next year compared to 2023 according to a recent study, new research shows that more than one third of employees at Canada’s small businesses have their eye on another benefit.

The report from Blue Cross found that given the choice of a $40,000 raise or health benefits, 36% of respondents would take the health benefits. If $25K was on offer, 41% would opt for health benefits, and 50% would do so rather than take an extra $10K in wages.

“Despite the financial challenges Canadians have faced this year, health remains a top priority,” said Tim Bishop, Managing Director, Blue Cross of Canada. “These findings were unexpected during times of high inflation and reinforce the inherent value Canadians place on health benefits.”

But struggling small businesses, including those facing additional costs of repaying or refinancing their CEBA loans, may baulk at the cost of providing health benefits for their staff.

The research shows that 39% of small business employers said the cost is a key barrier to offering health benefit plans, although the study found that the average cost is just $1,822 per employee annually and offers notable returns on the investment across key performance indicators such as recruitment, retention, and productivity.

Staff retention

With the battle for the best talent continuing across most industries, the 2023 Blue Cross Small Business Benefits Study also shows how benefits help retain talent.

Eight in ten employees consider a company’s health benefits before accepting a new role, and nearly three-quarters of employees with a health benefits plan would stay with their current employer even if offered more money elsewhere.

Conversely, more than three quarters of employees would think about leaving their current employer for one that offers a (better) health plan.

Nine in ten respondents said that having a workplace health plan gave them financial health and security, in line with those that said it had an overall positive impact on their health and wellbeing.

“As inflation and affordability concerns remain top of mind, Canadians are seeking stability and security,” said Bishop. “Offering health benefits can foster a healthier, more engaged workforce and provide employees with the reassurance that their health and the health of their loved ones is covered.”