Canadian organizations recognize the importance of flexible, personalized benefits for employee retention, yet most haven’t made the shift from traditional one-size-fits-all programs.
That’s one of the takeaways from PerkShift: The Evolution of Employee Benefits, a national survey of HR professionals and employers conducted by HR News Canada in partnership with Venngo, a provider of perks programs. It found that while 68% of organizations say flexible benefits are important or extremely important for retention, only 17% of respondents offer cafeteria-style plans.
That disconnect highlights a critical challenge facing Canadian employers as they compete for talent in an evolving workplace.
“The survey results show Canadian organizations are at a bit of an inflection point,” said Todd Humber, publisher of HR News Canada. “They understand what employees need, but haven’t yet overcome the barriers — whether cost, complexity or inertia — that prevent them from delivering it.”
The flexibility gap
The gap between recognition and action appears across multiple benefit categories. While 59% of survey respondents identified flexibility and personalization as areas needing improvement in their current benefits packages (the highest percentage among all categories) implementation of options that provide significant flexibility remains limited.
Health spending accounts are offered by 42% of organizations and lifestyle spending accounts by 20%, representing more targeted approaches to flexibility. But comprehensive cafeteria-style programs that allow employees to customize their entire benefits package remain rare.
“What HR is calculating is the additional upfront cost of implementation — HR resources, configuration of technology platforms, vendor integration, and communication,” said Sally Benn, senior vice-president of group customers at Venngo. “Another way to look at this is what are the potential costs of continuing to offer a traditional benefits plan where one size fits all.”
Those hidden costs include paying for coverage that some employee groups don’t value while failing to provide what matters to others, as well as expenses from turnover, recruitment and lost productivity, according to Benn.
Mental health emerges as priority
Mental health support has become a cornerstone of employee benefits, with 75% of organizations offering employee assistance programs and 59% providing therapy or counselling coverage. When rating mental health support in their overall benefits strategy, 42% of respondents called it high or top priority.
Yet a significant gap remains: Just 20% offer dedicated mental health days, despite 39% identifying mental health support as an area needing improvement.
“The disconnect exists because some organizations are lagging in the treatment of mental health and lumping in mental health as part of general health,” Benn said. “This structure relies on EAPs and sick leave rather than creating dedicated mental health policies.”
The distinction matters in practice. Mental health days send a stronger social signal and offer preventive benefits, while EAPs are more reactive once an issue exists. Data shows mental health leave has surged 300% since 2020, said Benn, and organizations offering mental health days see employees who combine these paid days off with EAP services returning to work about six days sooner than those who don’t.
Looking ahead, 25% of survey respondents identified mental health and wellbeing support as the area most likely to grow in importance over the next two to three years — second only to flexible and personalized benefits at 31%.
Remote work is standard
The survey found 70% of organizations offer remote or hybrid work arrangements, with 21% fully remote and 49% hybrid. Only 30% remain almost exclusively on-site, suggesting remote work has shifted from nice-to-have to standard practice based on this survey’s results.
“We’re seeing fundamental changes in how Canadians work.” Humber said. “Organizations that don’t adapt risk losing talent to competitors who offer the flexibility they expect.”
This workplace evolution extends beyond just location flexibility. Among respondents, 48% offer flexible work hours or compressed workweeks, 29% provide expanded parental leave, and 20% offer sabbatical or extended leave options.
Communication breakdown
Even when organizations offer valuable benefits, many employees don’t understand or use them. Only 52% of survey respondents rate their benefits communication as effective, despite using multiple channels including onboarding sessions (62%), benefits provider materials (52%), company intranets (49%) and employee newsletters (49%).
Just 10% call their communication very effective, while 42% rate it somewhat effective and 28% say it’s neutral.
“Organizations often share too much information all at once and fail to tailor messaging to life stage or preferences,” Benn said. “Communication of benefits needs to be fully integrated and frequent with accessible formats to ensure all employees have the information they need, when they need it.”
Studies suggest engagement with annual benefits updates can be as low as 30% to 40%. Employers often measure distribution metrics like email opens rather than comprehension, assuming awareness without confirming understanding.
Not only is effective communication important, employers also need to provide the right tools and support to ensure awareness and understanding. While 63% of organizations offer RRSP matching or pensions, only 17% provide financial literacy seminars.
Planning for change
The survey indicates growing momentum for benefits evolution. Among the 41% of organizations planning to introduce or expand benefits offerings in the next 12 months, many cited adding health care spending accounts, flexible benefits, enhanced mental health coverage and critical illness insurance.
Technology may ease some implementation challenges. As AI and automation advance, program administration should become easier and more personalized, Benn noted.
“The world is changing, and it is changing fast,” she said. “Technology will make companies more profitable, and program administration will be made easier and increasingly managed with AI.”
Satisfaction lacking
When asked about satisfaction with their benefits program’s comprehensiveness, only 6% reported being very satisfied, while 43% said satisfied and 33% remained neutral. Another 18% indicated dissatisfaction, revealing significant room for improvement.
The workforce evolution is accelerating. Jobs and portions of jobs will be automated, resulting in as much as 40% of the workforce being comprised of poly-workers, gig workers and remote workers, according to Benn. The future workforce will be global, more diverse and include five generations with enhanced expectations for personalization and emphasis on overall wellbeing.
“Organizations that take a broader approach to Total Rewards to include additional time off, work flexibility and other non-financial rewards such as housing stipends, elder care, and dependent education will be competitively positioned to attract and retain top talent,” Benn said.
The path forward
For organizations struggling to bridge the gap between recognition and action, the message is clear: flexible benefits have shifted from nice-to-have to must-have.
“Leaders understand that companies that invest in employees including reskilling and upskilling as well as providing a meaningful Total Rewards package that provides flexibility and choice, supports overall wellbeing and employee engagement will have the competitive advantage,” Benn said.
Leadership typically responds to two key tipping points: being market competitive to attract and retain talent, and ensuring dollars are spent cost-effectively to meet employee needs. Many leaders now realize that a one-size-fits-all approach cannot meet diverse needs while staying within budget.
“Once leadership becomes aware that flexibility is the most cost-effective way to deliver meaningful options, a traditional benefits plan becomes untenable,” Benn said. “Furthermore, as the future of work evolves, traditional Total Rewards programs will become more ineffective in meeting the needs of diverse employee segments.”
The online survey of 189 professionals was conducted by HR News Canada, in partnership with Venngo, from May to October 2025.
Access the full report
The full report is available to download here: https://hrnewscanada.com/perkshift/
