Earlier this summer, Canada’s finance ministers agreed to an expansion of the Canada Pension Plan. However, as a recent study by ADP Canada has found, many Canadians are still kept up at night worrying about their retirement.
The study reported that 77% of working Canadians would consider changing jobs if, all other things being equal, another employer offered better retirement support.
“We weren’t surprised that the majority of employees would leave for a job with better retirement support,” says Elizabeth Williams, Director of Brand and Communications at ADP Canada. “But,” she adds, “we were surprised that that number was 77%.”
The survey found that 70% of small business employees would consider leaving, in comparison to employees of mid-sized companies (86%) and large companies (74%.)
“We also found it surprising how many employees from mid-sized companies felt this way—at 86%, it was much higher than for smaller businesses,” says Williams. “Our assumption would have been that small businesses wouldn’t offer as much retirement support, so they would be likely to jump ship, but they actually came in at the lowest per cent, at 70%.”
Williams says the discrepancy could be attributable to a great sense of employee loyalty to smaller companies, but adds that, ultimately, 70% is still an alarming statistic. “If seven in ten employees are at risk of leaving your company, that should be worrying to you,” she says.
The survey also reveals that millennials are just as concerned about their retirement support, with 77% reporting that retirement benefits might prompt them to change jobs.
“Millennials have a reputation—obviously not earned, or deserved—that they ‘live in the now,’ and that they’re very focused on having a good time,” says Williams, “and I think these results prove that they are just as worried about their retirement as every other demographic.” She says that, between student debt and a rising cost of living, millennials are under a tremendous amount of financial pressure. “On top of that,” she adds, “the message is getting through to them that most Canadians are not saving enough for retirement. They’re looking for help.”
Williams sees the results of the study as an opportunity for employers looking to retain and attract top talent. “This is a good chance for employers to get out and snag some of these really talented people, by offering to help out with retirement savings,” she says. She encourages small to mid-sized businesses to revaluate their current offerings.
“Most medium-sized companies won’t have a defined benefit pension plan, like those offered by very large companies or the public sector, so they would want to look at a defined contribution plan,” she explains. “Employees pay a certain amount every month, and it’s just taken off of their paycheque. Many times employers will match whatever the employee is putting away every month, up to a certain amount. Those are the sorts of things these companies should be looking at.”
Ultimately, Williams hopes the results of the study will prompt a conversation between companies and their employees. “If you’re having to prioritize, you might want to talk to your employees and get a sense of what’s important to them—if it’s a choice between pizza on Fridays and a little matching contribution towards their RRSP, that’s a conversation worth having,” she says. “I think, based on this research, they might say, ‘yeah, we can live without pizza!’”