What you have to know about employee benefits in Ontario in 2025

n today’s rapidly evolving labor market, Canadian employers are recognizing the critical importance of offering competitive and comprehensive benefits packages. A recent survey highlighted that a significant majority—91%—of Canadian employers are planning to benchmark their benefits plans against market practices to remain competitive . This strategic move underscores the growing emphasis on aligning employee benefits with current industry standards and employee expectations.

Understanding the Need for Benchmarking

Benchmarking, in the context of employee benefits, involves comparing an organization’s benefits offerings with those of similar companies in the industry. This process helps employers identify gaps, understand emerging trends, and make informed decisions to enhance their benefits packages. The primary drivers for this surge in benchmarking activities include:

• Talent Attraction and Retention: With a competitive job market, offering attractive benefits is crucial for drawing and keeping top talent.
• Employee Well-being: Comprehensive benefits contribute to the overall well-being and satisfaction of employees, leading to increased productivity.
• Cost Management: Benchmarking allows employers to assess the cost-effectiveness of their benefits offerings and make necessary adjustments.

Key Findings from Recent Surveys

The emphasis on benchmarking is not just a trend but a strategic response to evolving workforce needs. According to the 2024 Canadian Emerging Benefit Design Survey, organizations are focusing on comprehensive benefits, including women’s health, fertility, gender affirmation, and neurodiversity. These areas, once considered niche, are now central to inclusive and competitive benefits strategies.

Moreover, the 2024 Canadian Workforce Trends Report Series by Gallagher revealed that 68% of employers are prioritizing emotional well-being dimensions in their benefits plans . This shift indicates a broader understanding of employee needs beyond traditional health benefits.

Emerging Trends in Employee Benefits

As employers benchmark their benefits plans, several emerging trends have been identified:

1. Flexible Work Arrangements: The demand for remote work options and flexible schedules has become a standard expectation among employees.
2. Mental Health Support: Increased focus on mental health services, including counseling and stress management programs, is evident.
3. Diversity and Inclusion Initiatives: Benefits that support diverse employee needs, such as gender affirmation care and neurodiversity accommodations, are gaining prominence.
4. Financial Wellness Programs: Employers are introducing financial planning resources and retirement savings plans to support employees’ financial health.
5. Health and Wellness Spending Accounts: Offering employees the flexibility to allocate funds to health and wellness services of their choice is becoming more common.

Challenges in Benchmarking and Implementation

While the move towards benchmarking is positive, employers face challenges in implementing changes:

• Cost Constraints: Balancing comprehensive benefits with budget limitations requires careful planning.
• Data Accessibility: Obtaining accurate and relevant benchmarking data can be difficult, especially for smaller organizations.
• Customization Needs: Tailoring benefits to meet the diverse needs of a multigenerational workforce adds complexity to plan design.

Strategies for Effective Benchmarking

To navigate these challenges, employers can adopt the following strategies:

• Engage with Industry Surveys: Participating in surveys like those conducted by Benefits Canada and Mercer provides valuable insights into industry standards.
• Consult with Benefits Advisors: Leveraging the expertise of benefits consultants can aid in designing competitive and compliant benefits packages.
• Solicit Employee Feedback: Regularly gathering input from employees ensures that benefits offerings align with their needs and preferences.
• Utilize Technology: Implementing benefits administration platforms can streamline plan management and data analysis.

The proactive approach of Canadian employers in benchmarking their benefits plans reflects a commitment to fostering supportive and competitive workplaces. By aligning benefits offerings with industry standards and employee expectations, organizations can enhance employee satisfaction, attract top talent, and maintain a competitive edge in the evolving labor market.