Expense or investment? The added value of group insurance for your SME

Are you a small or medium-sized business offering or considering a group insurance plan? Whether you have lots of experience or are new to the subject, group insurance management can involve several challenges.

Discover our series of articles on group insurance traps to avoid to get a firm grasp on the subject.

Trap: Viewing group insurance as an expense only

Employee benefits obviously involve a cost for the company and often for employees, depending on the type of plan. But should the focus be solely on the expense column, or can there also be a return on the investment?

Interviews with:

  • Jean Paul Albert, author and lecturer atUniversité Laval
  • Jean-Philippe Dauphinais, CEO, Rablab
  • Audrey Girard-Lachapelle, Group Insurance Advisor
  • Stacy Leduc, Digital Content Strategist, Rablab
  • Manon Poirier, CRHA, Managing Director of the Ordre des conseillers en ressources humaines
  • Alain Thériault, Partner, ExoB2B

Lately, we have been hearing a lot about the scarcity of labour. Employee benefits, especially group insurance, are often cited as something that employers can use to attract and retain the best employees. But is this a real selling point?

MP: In a context of labour scarcity, employers must find new ways to attract talent. A complete employee benefit offering, including group insurance, plays an important role in attracting workers. While governments, large companies, and many SMEs already offer group insurance, an increasing number of other employers also appear to be considering it.

JPA: Group insurance is definitely a significant part of overall employee compensation.

AT: As an agency specialized in business-to-business marketing, we offer attractive social benefits in order to stay competitive with the large number of other marketing agencies. This allows us to demonstrate our concern for employee well-being while reducing turnover.

What is the perspective of employees? Do they care about group insurance?

MP: Organizations that offer group insurance are often positively perceived by future employees. It gives them the sense that they are being taken care of, that the organization is there for them and, ultimately, for their families. Employees are increasingly looking for this kind of organization.

JPD: One might think that young people are less concerned about matters relating to health or leaves of absence. But I have found that group insurance is an increasingly common concern even though the average age at my agency is 26. It also definitely plays a role in employee retention.

SL: Even though we launched our agency only a few years ago, the fact that we offer group insurance keeps us competitive with well-established agencies when looking for new talent. As an employee, I know it’s a benefit that I appreciate and use. Even though my needs may not be the same as I get older, it will remain an important factor.

Does group insurance make it possible to reduce the costs of absenteeism and reduced productivity?

MP: It has been proven that offering group insurance increases productivity and reduces absenteeism. Investing in prevention reduces long-term costs.

AGL: Group insurance gives employees the tools to take care of their health and stay healthy at work. Paramedical care allows employees to consult psychologists, physiotherapists, dieticians and other specialists in order to improve their overall well-being. The wellness programs included in group insurance policies also contribute to raising the awareness of employees in this regard.

MP: For employers, most of the expenses are often associated with prescription claims, which can represent up to 80% of a plan’s costs. Disability leaves can also be very costly, especially for small organizations. That being said, there are mechanisms that businesses and insurers can put in place ahead of time to help employees continue working or return to work sooner, benefiting both employees and the organization.

AGL: I recently got a call from an employee on a leave of absence. She felt helpless because she needed to consult a specialist but had to wait several months for an appointment. Since she was covered by the Chambers of Commerce Group Insurance Plan, I was able to put her in touch with their network of health specialists and considerably reduce her wait time. Cases like these reveal a less well-known advantage of group insurance.

MP: Group insurance plans are definitely an investment. Very soon after they are in place, companies will find an improvement in their ability to both attract and retain workers and prevent and reduce absenteeism.

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