Total Rewards in a Career Journey

The HRPA sat down with some executives from Normandin Beaudry, who recently published remun, one of the most comprehensive total rewards surveys in Canada. They found that salary increases are higher and more meaningful early on in an employee’s career. For instance, an employee in a professional level job may experience an average annual increase upwards of 6% during their initial years, before that number tapers off to 4% per year. At the beginning of a career, the learning curve is steeper and the potential for growth within the position is greater, which is why we tend to see higher salary increases.

Although competitive salaries are important in attracting and retaining talent, it is not the sole motivation for today’s employees. “Our data results indicate that the primary factor of resignation is due to a lack of challenge and career progression,” said Geneviève Cloutier, Partner, Compensation and Performance at Normandin Beaudry. “For this reason, organizations must be vigilant in supporting employee goals and their career aspirations.”

There are a number of career advancement opportunities that transcend traditional promotions including entrusting employees with special projects or offering lateral movement within the company, allowing them to explore other areas of expertise and business.

As employees begin to plan for their retirement, their primary concerns become financial security and peace of mind. Insights from the remun survey indicate that organizations have historically struggled to align their total rewards packages with the requirements of future retirees.

Maxime Cardinal, Senior Principal, Investment Consulting and Pension at Normandin Beaudry explained: “From the initial 2012 remun survey to the 2023 edition, we observed a shift in organizational priorities towards savings plans. Meanwhile, the proportion of organizations offering Defined Benefit (DB) Plans decreased from 25% to 11% as employers struggle to shoulder the costs and allocate the resources required. Consequently, organizations are favouring savings plans, such as group Registered Retirement Savings Plans (RRSPs).”

RRSPs provide employers with simple and efficient means for employees to financially prepare for retirement. However, these solutions impose significant responsibilities on employees, including saving an adequate amount of money, making investment decisions, and managing longevity risk.

The remun survey confirms that post-retirement group benefits plans are becoming increasingly scarce. The percentage of organizations providing a post-retirement group benefits plan has plummeted by two-thirds since 2012. Specifically, the availability of post-retirement life insurance has declined from 30% to 10%, health insurance from 20% to 7%, and dental care from 8% to 3% between 2012 and 2023.

Today’s retirees still need a predictable and guaranteed source of income and financial protection such as those offered by an annuity, travel insurance, health insurance, etc. There are solutions available to employers that meet these employee needs without incurring operational or financial burdens.

These approaches are not limited to employees at early career stages but can also be extended to those hired mid-career or later. DB plans were originally intended for employees expecting to spend a significant portion of their career with the same organization to maximize their years of service under the plan.

However, organizations offering a combination of a group RRSP during their career with the option to purchase an annuity during retirement have designed a solution similar to a DB plan for employees, with no drawbacks for the employer. This arrangement ensures retirees can rely on a stable income sheltered from market volatility.

Organizations are perpetually striving to adapt and meet the evolving needs of their employees. Extending the same consideration to retirees can prove advantageous, as they often become influential employer brand advocates. In fact, many organizations now leverage a network of candidates driven by retirees.

“Utilizing reliable data and identifying trends serve as the cornerstone for strategic positioning against competitors,” said Ms. Cloutier. “These approaches not only aid in establishing actionable priorities but also facilitate the development of scalable and relevant total rewards, extending beyond the conclusion of one’s career.”

She continued: “In a dynamic professional landscape, organizations that prioritize the holistic well-being of their employees throughout their career will not only thrive in the competition for talent but also build a legacy of trust and support that extends far beyond the confines of the workplace. By leveraging comprehensive data insights available from our remun survey data, organizations can tailor their total rewards strategies to meet the diverse needs of employees at every stage of their careers.”