Top Mistakes to Avoid When Designing Your Employee Benefits Package
A great employee benefits package can help your business stand out, attract top talent, and keep your team happy. However, even with good intentions, companies often make mistakes when building or updating their benefits plans. These missteps can lead to employee dissatisfaction, lower productivity, and costly turnover.
Well-designed benefits matter. According to Mercer Canada, organizations with competitive and clearly communicated benefits packages are significantly more likely to report higher employee engagement and retention. In the 2024 Benefits Canada Healthcare Survey, health benefits ranked second only to salary as a top reason employees stay with their current employer, with 41% of plan members citing their group insurance plan as a deciding factor in retention.
Here are some common mistakes and practical ways to fix or avoid them.
1. Guessing What Employees Want
Companies often design benefits based on assumptions rather than actual employee feedback. This can result in unused benefits and wasted resources.
How to fix it: Run short pulse surveys and quick focus groups to better understand what employees value and use most. Conference Board of Canada research shows that organizations that regularly gather employee input are more successful in aligning benefits with workforce needs, leading to higher satisfaction and retention.
Quick tip: Keep surveys brief and frequent to encourage participation and not overwhelm your employees
2. Poor Communication and Education
Even the best benefits lose value if employees don't understand or use them. Complex jargon and scattered information can create confusion and frustration.
How to fix it: Use clear, plain language when explaining benefits. Provide concise guides, short videos, and quick workshops to help employees make the most of what's available. According to PwC Canada, employees who feel confident in understanding their benefits are more likely to engage with them and experience less financial stress, which can boost productivity.
Quick tip: Include benefit highlights in regular company updates and team meetings.
3. Lack of Flexibility
A one-size-fits-all package rarely meets the diverse needs of today's workforce.
How to fix it: Offer flexible or voluntary options so employees can personalize their benefits. Popular add-ons include additional life, accident, critical illness insurance, home, auto, pet insurance, identity theft protection, and virtual pharmacy. PACE partners with Perigon Life to bring voluntary benefits to our clients at zero cost to the company and an easy-to-use platform for your employees to opt-in and get the benefits they want at discounted rates.
Quick tip: Test new options with a pilot group before rolling them out company-wide to gather feedback and refine before a full roll out.
4. Underestimating Mental Health and Wellness
Neglecting mental health support can impact productivity, engagement, and overall employee well-being.
How to fix it: Invest in robust mental health resources such as virtual therapy, coverage for psychological services, mindfulness programs, and stress management tools. Deloitte Canada reports an average return of $1.62 for every dollar invested in workplace mental health programs after one year, increasing to $2.18 after three years or more.
5. Skipping Benchmarking and Industry Analysis
Without knowing how your benefits compare, you risk losing talent to organizations with better offerings.
How to fix it: Regularly benchmark your plan against industry peers. The Conference Board of Canada notes that organizations reviewing and updating benefits annually are better positioned to attract and retain top talent.
Quick tip: Use external data and industry reports to ensure your plan stays competitive.
Avoid Costly Mistakes by Partnering with Experts
Working with experienced benefits consultants like PACE keeps your strategy proactive, competitive, and aligned with employee expectations.
We can help you:
· Run employee surveys and turn insights into action
· Benchmark against industry peers
· Craft clear, engaging benefits communications
· Design flexible benefits tailored to your workforce
· Evaluate results and update your plan regularly
PACE Consulting guides you through every step of benefits planning so your investment delivers maximum impact and long-term satisfaction.
Ready to build a better benefits package?
Contact PACE Consulting to create a plan your employees truly value.
Disclaimer: The information provided in this article is for general informational purposes only and should not be considered financial or legal advice. Consult professional advisors for specific guidance related to your organization. While we strive for accuracy, we assume no liability for any errors or omissions.
Sources
1. Mercer Canada (2025). Benefits and Productivity Report.
2. Benefits Canada (2024). Healthcare Survey.
3. Deloitte Canada (2024). The ROI in Workplace Mental Health Programs.
4. PwC Canada (2024). Employee Financial Wellness Survey.
5. Conference Board of Canada (2025). Canadian Employee Benefits Survey.