COMP NEWS -A Toronto-based company is looking to innovate its retention strategies with a new type of employee benefit – vested bonuses.

Signing and retention bonuses are usually geared toward executives, but Toronto-based startup Benefi is looking to tweak this concept with a product that businesses can offer to all employees.

“We look to solve a real problem that employers have been encountering for the past couple of years … the bonds between employer and employees have largely been broken,” said Patrick Dunn, Benefi’s chief executive officer.

In Benefi’s bonus vesting program, companies offer employees a loan at zero-per-cent interest that is “forgiven” after a specific amount of time as long as the employee is still with the company.

For example, a company can put together a job offer for an employee that contains a bonus vesting opportunity of $10,000 that will be forgiven between six and 36 months. The employee would receive the cash right away, and the loan would be forgiven after the specific amount of time stipulated in their employment contract.

The move to provide employees with vesting bonuses is a benefit that cuts both ways, according to its advocates. Companies are increasingly concerned about long-term retention amidst the Great Resignation, and many employees indicate that their productivity is impacted by financial stress. A lump sum upfront could benefit both employers and employees.

Accessing funds quickly like this could help a variety of employees, considering new research shows 75 per cent of employees are stressed about their finances, and 84 per cent believe employers should be responsible for their financial well-being.

As companies consider a more holistic approach to employee wellness, benefits providers are also considering how financial wellness affects companies and their people.

According to insurer Manulife, employees’ financial wellness can have a big impact on a company’s bottom line because these issues follow people to work.

Manulife data shows 93 per cent of professional counsellors said financial stress directly impacts productivity. With 40 per cent of surveyed working Canadians stating they are financially unwell, this can translate into huge losses in productivity and revenue for companies.

Using a bonus vesting approach may be a solution to help employees overcome financial challenges, while helping employers retain talent for longer. In the example above, if the employee decided to quit or was fired before their whole bonus was forgiven, they would need to pay some of the cash back, based on the terms of their agreement.

To read more about Bonus Vesting, click here.

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