Compensation and benefits


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You are paying up to 30% of your payroll for benefits and pensions. Are you getting full value? Have you considered different funding arrangements? Have you considered flexible spending accounts? How about considering an ASO plan if you are over 100 employees? How about integrating a wellness program into your benefits program and receive a 20 to 1 payback in terms of reduced benefit costs, increased productivity, improved lost time, and increased employee health?

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  • What does this mean for the workplace?
  • Introduction to Employee Benefits CG Hylton & Associates Inc   • Insurance and disability benefits: an overview and explanation   • Filing claims, benefits packages, disability claims: where does the money go? How can your employees access it?   • How to answer your employees’ claims questions   • Salary surveys that work   • Retirement plan options: group RRSP vs. defined benefits pensions
  • Introduction to Employee Benefits CG Hylton & Associates Inc
  • Do First Nations need Workers Comp?
  • Introduction to Employee Benefits CG Hylton & Associates Inc
  • Introduction to Employee Benefits CG Hylton & Associates Inc
  • Introduction to Employee Benefits CG Hylton & Associates Inc
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  • A claimant with depression is defined as any claimant with at least one net paid claim for an anti-depressant medication during the one year period. A claimant with depression has an average amount paid of $1,259, whereas a claimant without depression is only $388. This is an increase of over 220%. Note that this can not be compared to the average covered cost as it is for paid claims and not covered claims.
  • The co-morbidity with depression shows the impact that depression has on other conditions. 64.4% of the dollars paid for claimants with neurological pain are claimants that also have depression. This is followed by other mental health conditions like anxiety disorder at 61.0% and sleep disorder at 50.3%.
  • Compensation and benefits

    1. 1. Getting Compensation Right 1:30 – 2:20 Tues Feb 8, 2011 Chris Hylton, MA CG Hylton & Associates Inc. 800 449-5866 1
    2. 2. Agenda2  What is compensation, total compensation  Developing a salary grid  What to do with holidays, entitlements employees have for working statutory holidays  How many vacation days are fair, what if employees don’t use all their vacation benefits?  What benefits are most important, and what does a competitive benefits package contain?  Tips and advice on shopping around for the best deal on benefit packages
    3. 3. 3 Do you have any compensation or benefit issues we can try and solve for you in this session?
    4. 4. What is Compensation?4  Any ideas?
    5. 5. Creating a Compensation PlanCompensation is an exchange of moneyor something of value for work deliveredThere are many methods ofcompensation for staffRegardless of the method used,customizing the Plan to fit yourorganization is a must
    6. 6. How Do I Customize a Plan?To Customize you need to: Know what your mission is Know what is important to your organizations success Know what kind of culture you have or want to promote Make sure the budget is capable & use the staff for this
    7. 7. Without this link, you may have Conflict between you goals and compensation No compensation for things that contribute to the organizations success and visa- versa No compensation for desired behaviors and visa-versa
    8. 8. Therefore, you need to develop aCompensation PhilosophyWith this:• You can see a clear linkage between the organization’s mission, goals, and desired behaviours and the compensation system• You know where you want your salaries to be in relation to the market
    9. 9. To Create Mission & Goals9  Use S W O T  Develop consensus  Approval from Council
    10. 10. Types of Compensation10  Non cash  Cash
    11. 11. Non cash compensation11  Work environment  Management culture  Job Autonomy  Input into decision making  Variety of tasks on the job  Training  Benefits
    12. 12. Work Environment  Is environment pleasant, harassment free?  Are tools & equipment able to meet the needs of employees? 12
    13. 13. Management Management Culture Autonomy  Does the  Can employee make management trust & decisions on their support the workers? own?  Does the  Can employee management help the manage their time worker to succeed? while getting the  Are expectations results desired? clear? 13
    14. 14. Decision making / Variety  Do employees  Is there nice have real input variety in each into decisions job? that affect their position and results? 14
    15. 15. Training / Career Development Remember  Is sufficient  All of these training provided items have to be to allow the tied to the worker to mission, complete their organization’s position or definition of operate the success, culture equipment they and be 15
    16. 16. Various CashCompensation Options  Flat rates  Ranges  Merit raises  Skill or knowledge based pay  Autonomous work group  Incentive pay  Bonus schemes 16
    17. 17. Creating the compensationsandwich many choices you decide how to create your “compensation sandwich” Ingredients used depends on org mission, definition of success, culture and the ability to pay 17
    18. 18. Developing a ConsistentSalary ScaleTo do this you need:Internal Equity - how jobs are paid inrelation to other jobs within theorganizationExternal Equity - how jobs are paid inrelation to other companies
    19. 19. What is more important19  Internal Equity?  External Equity?  There is no right answer, don’t by shy
    20. 20. To achieve Internal Equity…You need a job evaluation plan to ensure all jobs are measured with the “same ruler” A Factor Point System is the Most Effective unless Your Organization Is Small( Under 10 People) For organizations less than 10 people , a job ranking system is probably better. This assumes the organization is not going to grow
    21. 21. A Ranking System … Ranks the positions according to how much they contribute to the accomplishment of the organizations mission It allows you to determine which is worth most It is only effective if the organization is small (under 10 people) Clear communication is vital
    22. 22. Salary Surveys22  Great way to determine if your pay levels are competitive  Address external equity issues  You can do yourself or we can provide you with an online survey for your group  Data collected online confidentially, reports are viewed and printed off online  Job descriptions are online at NOC
    23. 23. We like to use the NOC23  It is free, online, easy to access  Has virtually every job listed  Provides a 4 digit no for each job  You can use the number for org charts  Makes the whole process transparent  Cuts down on the complaining 
    24. 24. To achieve External Equity…You need to define your market. Market is defined as to who you compare to, it’s your choice. Eg. same department or employer in your area, similar band/company in an other province. You need to define where you want to be in the market (plus or minus x %) Use your market comparison for cost of living adjustments as well
    25. 25. Now you have consistencybecause….Internal equity – all positions aremeasured with the same ruler (jobevaluation plan)External equity – you use the samemarket for all jobs.Remember: in creating the above youused your organizations mission,success factors and culture.
    26. 26. Role of Consultant? Assist with the identification of factors Link factors to mission, organization’s success, culture and budget Do salary survey Create the plan, assist with implementation and provide ongoing support; at least a year after implementation
    27. 27. Vacations, Stat Hols27  What are the rules  Does an employee have to work a stat hol?  What if an ee does not use their hols?  What is the easiest thing for an employee to steal?  What is the easiest thing for an employer to give? 
    28. 28. Benefits Agenda Overview of Benefits Premiums vs Claims Retirement Plans
    29. 29. What will you do when...An employee dies or becomes disabled? Willyou feel a sense of financial obligation to theemployee and their family?Trying to attract and retain good employees?You or your employees travel extensively forbusiness or pleasure?You or your employees are confronted with anexpensive dentist bill?
    30. 30. Concept of Group Insurance Nobody expects to die, be injured, or become ill tomorrow However, if this does occur it can cause a catastrophic financial lossA benefits plan is a low cost solution that can provide protection for the employee & employer from catastrophic financial losses due to death, injury or illness
    31. 31. Typical Group Benefits Employee and  Health Dependent Life Insurance  Vision Accidental Death and Dismemberment  Dental Optional Term Life Short Term Disability  Health Spending Long Term Disability Account  Employee Assistance Program
    32. 32. Why Life Insurance?Life insurance "creates cash" for needssuch as: funeral & burial charges probate fees taxes at death income replacement mortgage childrens education wealth & estate creation
    33. 33. Why Accidental Death &Dismemberment?  At dismemberment... for changes to ones lifestyle  At death... extra income to deal with an "unexpected" loss
    34. 34. Why Disability Insurance?Where would the money come fromif you became disabled? Savings Loans Spousal income Sale of assets
    35. 35. Why Disability Insurance?Did you know that: Your chances of winning the Lotto 649 draw is 1 in 13.9 million The odds of being disabled for >90 days during your working career are 8 x higher than the chances of dying during the same period The average length of a disability which lasts over 90 days is almost 3 years
    36. 36. Why Disability Insurance?The average disability which goes over 90 days lastsan average of 2.9 years: 4.0 3.4 3.4 3.5 3.5 3.5 3.2 3.3 3.3 3.1 3.0 2.8 2.8 2.9 2.7 2.4 2.5 2.2 2.1 2.2 Years 2.0 1.5 1.0 0.5 0.0 25 30 35 40 45 50 55 60 At Age Women Men
    37. 37. Advantages of STD or LTDvs Workers Compensation STD WCB 24 hour coverage Y N Covers an illness Y N
    38. 38. Do you need Workers Comp?38  For activities on reserve no  For activities off reserve yes  What about the provincial or federal highway which runs thru the reserve?  What does your group benefits booklet say?
    39. 39. EI Rate Reduction Most STD or WI plans are eligible for the EI Rate Reduction Savings of $.30/$100 of payroll Savings applied to employer portion of premium 5/12 of savings must be re-distributed to the employee in the way of:  cash rebate  new employee benefits  enhance existing employee benefits
    40. 40. Why Health & Dental? A "Maintenance Contract" for the organizations most valuable resource Peace of mind for employees A better standard of living Tax free Owners & Execs
    41. 41. Dental Options  Deductibles  Calendar Year Maximums  $750 to much higher amounts  Periodontal Scaling Units  6, 10, or 14 units per 12 months  Recall Examinations  2 per 12, 1 per 9, or 1 per 12 months  Oral Hygiene Instruction
    42. 42. Typical Reasons for Calls to EAP42 Work place Family 18% 8% 25% Alcohol Substance Abuse 25% Depression 22% Stress
    43. 43. Reasonable Cost43  EAP costs fraction of average medical or dental plan  $200 per ee per mo for Dental insurance  $5 per ee per mo for EAP What Price?
    44. 44. Exclusions in your Benefits Plan44  Read the fine print  What is excluded in your plan  Travel Medical duration, working  War zones  Terrorism  Non commercial aircraft  If you have ees working or flying in any of the above pay extra to waive the exclusion!
    45. 45. How Much Does a Plan Cost? Demographics of the group Level of coverage for each of the benefits The volume of benefits Prior experience of group Group size If members are Treaty or not
    46. 46. Demographics and Rates Employee data is the most critical part of pricing Basic Monthly LTD Rates Per $100 Basic Monthly Life Rates Per $1000 4 1.2 Basic Monthly Rate 3Basic Monthly Rate 0.8 2 0.4 1 0 0 Age Age Age Age Age Age Age Age Age Age 20 30 40 50 60 20 30 40 50 60 Age Group Age Group Males Females Males Females Source Great-West Life
    47. 47. 2. Claims vs Premiums Your plan is priced on the basis of your demographics and your usage If you are older and heavy users you will pay more than if you are young and light users
    48. 48. Cost Saving Tips48  Broker commission  Carrier charges for administration  Reserve charges  ASO or fully insured  Group size, join together related groups, you can still vary plan design by group, and have individual premium statements, save lots  Tax effective plan design  Use a good broker
    49. 49. Advantages to Employer Established corporate policy in the event of death or disability Attract and retain key employees Increased morale Reduced absenteeism and increased productivity among employees Tax incentives Hassle-free administration
    50. 50. Advantages to the Employee Basic protection for the employee and family Much less expensive Higher standard of healthcare than otherwise possible Tax free compensation Covers the “uninsurables” Hassle free administration
    51. 51. Employee assmart shopper Best plans today encourage employees to become smart shoppers Deductibles, co-pays
    52. 52. Health Spending Account Health Spending  dental 20% of Account basic and 50% of major restorative Funded by savings  50% of ortho, or $ sit in ee name over max used for medical  vision over $200 dental expenses, not covered by plan  many other applications  tax free to ee
    53. 53. New Types of Coverage Critical Care Convalescent Care New AD&D benefits EAP Long Term Care
    54. 54. Impact of Mental Health on Costs Employees with depression had annual drugclaims 2 1/2 times larger than employees whodo not suffer from depression co-morbidity: neurotic pain, anxiety disorders,sleep disorders, stomach hyperacidity and mildto moderate pain.“there can be no health without mental health”Source: Centre for Mental Health in the Workplace and Great West Life
    55. 55. The impact of depression in the workplace $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Amount Paid ($) Per Claimant All Claimants Claimants with Depression Claimants without Depression Source: Centre for Mental Health in the Workplace and Great West Life
    56. 56. Co-morbidities of depression70%60% 1 - Neurological Pain50% 2 - Anxiety Disorder 3 - Sleep Disorder40% 4 - Mild-Moderate Pain 5 - Stomach Hyperacidity 6 - Inflamation, Muscle / Bone30% 7 - Asthma / COPD 8 - Infection, General Bacteria20% 9 - Blood Pressure 10 - Elevated Cholesterol10%0% Percent of Amount Paid for Claimants with Depresson Source: Centre for Mental Health in the Workplace and Great West Life
    57. 57. Role of Consultant? Look at plan design & rates Look at plans that ensure that owners never pay anything out of pocket that may be run thru the company Obtain quotes from other carriers Consultant is “free” as our fees are paid by commission by the carriers in the rates
    58. 58. What we need to do Benefits Review Booklet  Idea of any Employee data plan design or Experience administration Letter of authority changes you Premium History would like to make
    59. 59. Retirement Plans RSP plan, employer and employee funded Defined Benefit Pension, employer funded Pros and cons
    60. 60. RSP or DC Plan Money contributed by employer, say 5% of salary Matched by employee Invested Grows over time Employee gets monthly income at retirement
    61. 61. Money for free INAC has matching funding for many groups For taxable staff CCRA gives employees back most of their pension or RSP contributions!!! For Owners pensions are a great way to get surplus money held in the Corporation out of the Corporation tax free Set up an IPP and recapture the difference between what the owner paid to his/her RSP and the increased cost of the IPP
    62. 62. Our offer to you62  Please call if you have any HR, or workplace issue that you are overwhelmed with  We can help you  We also are pleased to do Free Workshops for your organization (some limits apply) Let us know what your needs are and we will make it happen!
    63. 63. CG Hylton - Services HR Consulting  Benefits, Pensions, Job Descriptions EAP Salary Grids  Strategic Planning Wellness at Work  Drug and Alcohol Staff Morale programs Training and  Dept re-orgs Workshops  Leadership compensation Tel 403 264 5288 63
    64. 64. Thank you for the opportunity to64 meet today! Tel 403 264 5288 or 800 449 5866 (800 4hylton)