Request a Quote

The truth about cutting benefits


It’s 10 days into 2018 and my google alert for ‘employee benefits canada’ is lighting up. The issue with the Tim Horton’s family cutting back on benefits as a result of the minimum wage has snowballed into a boycott and picketing.


Here’s what we’ve observed from CEOs, CFOs or HR Leaders when they are forced to reduce benefits premiums:

  1. It’s never something they want to do.
  2. It keeps them up at night.
  3. They struggle with the best way to communicate this to the team.
  4. Much of the time, the company has absorbed several cost increases over time, and it’s becoming less possible to do so.
  5. They’ve quoted multiple options and alternatives before arriving to this point.


Both sides of the aisle are in arms. Labour activists are using words like ‘repulsive,’ ‘boycott,’ and other words a business owner cringes to find when googling their business. Business proponents are insulted at the setup of a ‘benefits hotline’ set up by Sean McKenny, president of the Ottawa and District Labour Council (ODLC), where employees may call in to out their employer cutting benefits. McKenny recently explained to the CBC that he would use the information gathered to call the employers to talk them out of cutting benefits. If that doesn’t work, he’ll publicly out and shame employers who have to cut benefits.


As someone who runs a business, I can tell you that no business owner wants to cut benefits.


Noone wants to be the ‘bad boss’. Business owners know that cutting anything in the company can lead to people updating their resumes, loss of morale, and the subtle nag that it’s not the last time you’ll have to make cuts.


But there’s a right way to rebalance things financially.


We watch hundreds of employers having to make adjustments to their Canadian benefit plans all the time. We’ve learned a few things from HR leaders we service and admire about how to handle things when the board brings the news that cuts are mandatory. Here are some of their best practices.





  • Do remember who you’re speaking to.



Your team is the beating heart of the organization. The good people who work for minimum wage are grinding hard, just like you are. They set their alarms for 5:45am, get on the bus at 6:30, and ride 90 minutes to start their shift at 8am when others are checking instagram. Show your team members respect with your words. Your words have power.



  • Do see if you can add something back in to provide balance.



The best HR leaders we’ve observed find a way to add something back when they are forced to take something away.


Look to your vendors to ask for creative solutions. They may be willing to reinvest their Christmas gifting dollars into a wellness investment, like a visit with a nutritionist or an Employee Assistance Program



  • Do prioritize your dollars to align with your values.



We often are faced with the hard decision to help clients curb escalating massage and chiro spending, which directly impacts their bottom line. Use dollars to boost benefits that the most vulnerable will thank you for.


Coverage for home nursing, social workers, psychology, fertility, or addiction treatment will go a longer way than making sure everyone has designer lenses.


While the majority may resent you for trimming back their massage, the one person’s life you saved with rehab coverage might allow you to sleep at night.



  • Do give your team notice and time to adjust.



There’s this unwritten rule in benefits that if you give employees too much notice, there’ll be a ‘run on the bank’ situation in people trying to claim benefits leading up to the end date. I’ve seen it happen, and it absolutely eliminates any savings you were trying to glean, while also souring the mood with cutting benefits – lose/lose.


So while you need to provide a reasonable window, don’t give no notice. One week is better than one day.



  • Be authentic.



Don’t serve up fluffy excuses or corporate jargon for the reasons. Your team can smell when someone is being disingenuous. Be honest, and be deeply respectful about what your team sacrifices in order to keep the company running. Show the items that you decided not to cut as a priority.





  • Don’t use harsh language in your messaging.



See ‘DO’ #1 above. Be kind and respectful. Thank your team for their hard work and express your pride in having the greatest team in Canada. Getting to a living wage is a tremendous step forward for many families.


  • Don’t cut back on employee rewards unless it’s the area of last resort.



Make sure you’ve exhausted all other options before resorting to cutting total compensation. Any excess waste that you haven’t cut back will be vilified.


Chat with your front-line team members. They have an uncanny ability to pull out what money is wasted, and what can be trimmed. Count up those pennies and see if you can make a dollar. Then, be fully transparent with your team that you reviewed all options and was successfully able to cut back on the less important things.



  • Don’t forget that we live in an age of public information.



You must assume that anything you say is being recorded. Anything you tweet will be shared with the world. Anything you print will be screenshotted and circulated. Speak as if the whole world can hear you.



  • Don’t cut life sustaining items.



If you absolutely have to chop benefits, do everything you can to avoid downloading more premiums to employees. This will only further push up costs by creating an anti-selection situation. Employees who opt-out today will have to complete a full medical when they need to opt back in…and we’ve seen good people be declined because of something as small as low iron.


Are you able to find savings instead through:


  • Asking your broker what fees can be squeezed given the volume and growth you’re delivering each year?
  • Asking your broker or insurer what surplus can be paid back to you?
  • Asking your group benefits broker if any government subsidy programs exist for benefits (See: EI Premium Reduction Program / Ontario Trillium Drug Program).
  • Tell your group insurance broker or insurer that you need a list of 10 areas of savings that do the least damage regarding patient health.



  • Don’t release your copy until you’ve had a second…or third…set of eyes.



Have someone review your work. Don’t shoot off anything until it’s been triple checked.


Noone wants to cut benefits, but if you approach it from a sensible and tactful approach, you may be able to come out of this without a picket line at your door.