Manulife Financial Small Business 2012
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2012
Manulife Financial
Small Business
Research Report
Manulife Financial
2012 Small Business
Research Report
3 You have a story to tell
4 Executive summary
4 Methodology
5 Selling on value
9 Prospecting new clients
12 Building relationships
15 The role and importance of retirement plans
18 Maintaining the future of benefits plans
22 Advisory board
23 About Manulife Financial
Cover photos: iStockphoto, Veer
F O R E W oR D
You have
a story to tell
N ot so long ago, just about everyone was
a small business owner. Whether you
grew crops, built furniture, worked with metal
As an observer, I was fascinated as I listened
to the advisory board talk about their first-hand
experiences. Some commented on how they are
or just about anything else you can imagine, using retirement planning to address business
you were an entrepreneur in your own right. It owners’ fears about the economy, and how
just came naturally. PRPP legislation can be used as an opportunity
Today, those of us who are not small busi- to attract and retain key employees. Advisors
ness owners admire those with the qualities and felt strongly that, more than ever, their role is to
drive required to take a personal vision and turn educate and inform, especially since Canadians Marc Avaria
Vice-president,
it into reality. It can be hard for us to imagine now need to spend more time planning for Group Small Business
what owning a business is like. That’s where the their future financial needs. Manulife Financial
2012 Manulife Financial Small Business Research Among benefits advisors, there was discus-
Report can help. sion about how owners aren’t always looking
This report, our second annual survey of small to add to or take away from their benefits
business owners, continues to look at the many plans, but they need help communicating the
challenges and priorities entrepreneurs juggle, value of the plan to their employees. Others
digging deeper into ways in which advisors can talked about how employers feel the stress of
help. The report also breaks new ground by running their businesses, but might not always
exploring how small business owners feel about recognize how stress affects their own staff.
their relationship with you—their employee Some advisors are finding success by using
benefits advisor. new media to support their sales efforts and
The 2012 survey results fall into five key tell their stories online.
themes: prospecting new clients, selling on value, These are just a few of the many ideas and
building relationships, the role and importance of topics found on the pages that follow, so I
retirement plans, and maintaining the future of encourage you to read on. Consider putting this
benefits plans. After the survey was completed, information to use in order to tell your own story
the themes and data were presented to an advi- in new ways when prospecting for clients and
sory board of your peers—group benefits and building stronger ties to your current customers.
retirement planning advisors. They interpreted Also, please visit smallbizadvisorweek.ca,
the findings and suggested ways to use the infor- where you will find additional sales tools, edu-
mation, drawing on their years of experience and cational case studies and videos. I hope all
sharing personal stories and real-life examples. the materials are useful as you engage with
Photo: Christine Kufske, Click Photography
Those lively and invigorating panel discus- your clients and help them achieve their small
sions have been used to write the report you business goals.
are about to read. With warm regards,
Manulife Financial Small Business Research Report Foreword 3
Methodology
Executive summary
Small businesses in Canada now
employ more people than they
did five years ago.1 With larger The Manulife Financial Small Business Research Report is based on the results of an
numbers of employees come online survey of 1,101 Canadian small business owners and senior managers across
increased challenges and costs. industry sectors and regions. The research was conducted by the Rogers Connect
Market Research group of Rogers Publishing Ltd., on behalf of Manulife Financial.
Owners need their small busi-
The survey was fielded in April and May 2012. For the purpose of this research,
ness advisor like never before. “small business” was defined as having between two and 100 employees. The
To capitalize on this opportunity, margin of error is ±3.0%, 19 times out of 20. The following charts provide some
advisors can set themselves of the key demographics of the respondents.
Note that some response categories in this report do not add up to 100% due
apart by striving to provide value
either to the rounding of numbers or questions that allowed respondents to provide
at every step of the lifecycle of multiple responses. Base: All respondents; N=1,101
their relationship with a small
business client.
The 2012 Manulife Financial Organization size Location
Small Business Research Report 51–100 Atlantic
8% Canada
explores this lifecycle using five 7%
B.C./
key messages: selling on value, Territories
21–50 16% Quebec
prospecting new clients, build- 17% Alberta 22%
ing relationships, the role and 2–10 14%
importance of retirement plans 11–20 61%
14% 7%
and maintaining the future of Ontario
34%
benefits plans. When advisors
support clients through the
Average: 17.9 employees Manitoba/Saskatchewan
cycle in the ways outlined in this
report, they’ll help bring greater
success to their clients and
Position Number of years in business
themselves.
50+: 7% No answer: 3%
19% Less
than 10
Controlling 24%
9% 25–49
ownership 28%
47%
Equal
partnership 10–24
26% 38%
Minority ownership: 9% Average: 21.9 years
Senior management role
without any ownership: 19%
Total ownership (net): 81%
1. Industry Canada/Statistics Canada
(2011): http://www.ic.gc.ca/eic/site/
sbrp-rppe.nsf/eng/h_rd00033.html
4 Executive Summary Manulife Financial Small Business Research Report
SECTION ONE
Selling on value
S mall businesses make up 98% of all
companies with employees in Canada,
according to Industry Canada. Almost half
owners/senior managers say they understand
how offering a health benefits plan will help
their business and 41% agree that they have
(48%) of the working population is employed a responsibility to ensure their employees save
by a small business—up from 41% in 2005.2 for retirement. Almost all (95%) are aware that
With more Canadians working for smaller orga- satisfied employees are more productive and
nizations, advisors continue to play a crucial focused; however, one-third (33%) do not see
role in showing owners and senior decision- how a benefits plan will help. Perhaps unsurpris-
makers the value benefits and retirement plans ingly, more than half (51%) don’t believe that
can add to their employees’ lives and to their it’s more effective to provide employees with a
Photo: iStockphoto
own business. generous health plan than to pay them higher
So what do owners say about their benefits wages, while 58% say they have no responsibility
and retirement plans? In the Manulife Financial to ensure employees save. It seems there is an
Small Business Research, 66% of small business opportunity for advisors.
Manulife Financial Small Business Research Report Selling on value 5
quoted FIGURE 1
“Stats and Selling on value
Strongly agree Somewhat agree Total agree
numbers lie Satisfied employees are more
73% 22% 95%
flat, but if you productive and focused employees
have some Having a company health benefits plan
of the stories is as much for my own peace of mind as 33% 40% 73%
for my employees
and potential
It’s more effective to provide my employees
solutions with a generous health benefits plan than 11% 37% 48%
behind them to pay them higher wages
from other I don’t really see how offering a health
clients, they benefits plan will help my business 15% 18% 33%
become
0% 20% 40% 60% 80% 100%
much more Base: All respondents; N=1,101
effective.
”
—Teresa Norris-Lue,
Cowan Insurance
“The link between the benefits plan and sat-
isfied employees isn’t being made,” says Roger
benefits or retirement plan can have on a small
business, particularly on its bottom line.
Group d’Eschambault, president, dElta Benefits Inc. in However, communicating the value of benefits
Saint-Lambert, Que., who believes advisors may and retirement plans requires more finesse than
need to do a better job of listening to clients addressing tax advantages and cost savings. “In
to identify ways to link benefits and retirement the past the industry has extensively sold prod-
plans to making employees healthy, happy and uct, but now we need to look at plans from the
better prepared. viewpoint of our clients’ overall corporate objec-
Herb Goedecke, president and chief executive tives, aligning benefits and pensions with them,”
officer of Aero Corporate Benefits in Waterloo, says Drew Pritchard, principal of Reuter Benefits
Ont., agrees. “There seems to be a significant in Richmond Hill, Ont. “Creating value for a client
level of ignorance about where [these plans] fit requires the underwriting of programs that are
in. It might explain some of the complacency meaningful, affordable and sustainable from the
about putting one in place.” corporate standpoint.”
For owners who are juggling a mix of issues A relevant and meaningful plan requires collect-
related to running a successful business, it can ing information on the company—obtained during
be difficult to see how a benefits or retirement initial meetings for prospective clients—and per-
plan leads to satisfied employees and is therefore sonalizing the data so they resonate, says Pamela
necessary. The survey data show only 35% of Glendinning, president, Glendinning Insurance Ser-
owners/senior managers say offering a benefits vices in Kelowna, B.C. “If I go in with general stats
plan is a must-have within their industry, while it means nothing to them,” she says, but when
38% are neutral and 27% say it’s not necessary. you show an owner his company’s benefits usage
Those who do offer a plan seem to understand or how much each employee is saving per year,
the value of it. The top reasons for doing so everything changes and you’ve got their attention.
are attracting and retaining employees (28%), Once a small business owner is engaged with
keeping up with the competition (17%) and his own data, bring in storytelling, says Teresa
ensuring the health and well-being of employees Norris-Lue, vice-president, benefits, Cowan
(17%). Only 3% see offering a plan as creating Insurance Group in Cambridge, Ont. Advisors
savings for the organization. Clearly, there is an can share their stories about other clients with
opportunity for advisors to spend extra time similar demographics and numbers who have
educating prospective clients (and some existing run into serious challenges with employee health
ones) on the positive outcomes an appropriate issues or have seen employees retire without any
6 Selling on value Manulife Financial Small Business Research Report
meaningful savings. “Stats and numbers lie flat, Economic effect TOP TIPS
but if you have some of the stories and potential In last year’s survey, 86% of employers reported
solutions behind them from other clients, they “feeling an obligation to take care of their employ- Explain to clients
become much more effective,” she says. ees,” but this year that number has fallen to 63%. how a benefits
Storytelling also works when engaging clients Smaller companies (two to 10 employees) are least and pension plan
with additional health products and retirement likely (57%) to say they feel an obligation to take attracts talent,
plans. “Having a story to link to is so [important],” care of their employees (vs. 74% for companies creates loyal
says Sam Bruno, life insurance and employee ben- with 11 to 100 employees). In fact, 11% of the employees and
efits specialist, Underwriters Insurance Brokers in smaller companies say the only real obligation they keeps staff healthy
Kamloops, B.C. “Six years ago I had a very mild feel to their employees is to pay them. and productive. Be
heart attack—it was a wake-up call. I had a small The advisory panel believes the challenging sure to mention that
critical illness plan. I use that story to add CI benefits economy has played a role in the decrease. “In losing workers can
on to employee benefits,” he says. For retirement most of the major centres there are not the job be more costly in
plans, an advisor can explain to a cost-sensitive opportunities that existed four years ago. People the long term than
prospective client how another client implemented are concerned about their financial security,” a benefits plan.
a group RRSP to retain employees and, to make it says Pritchard. As a result, owners are reluctant Get to know the
affordable, started with a low employer match that to direct money away from other aspects of the corporate objectives
increased slowly over time as the company grew. business or make investments in areas where the of your clients’
business. Align
the retirement and
benefits promise
FIGURE 2 with those goals.
What prompted you to offer an employee When presenting
any data to clients,
health benefits plan? be sure to customize
them so clients
Attract/retain employees 28% can relate to the
Keep up with competition/ information being
industry standards 17%
presented.
Ensure health benefits/well-being
17% Identify stories and
for employees and their families
Necessary/employee needs anecdotes about
8%
how comparative
Already/always had one 8% organizations
improved their
Right thing to do/responsibility 7% businesses by
offering a benefits
Compensation/benefits plan/package 5%
or retirement
Requested by employees/suggestion 5% plan. Share these
with clients to
Common sense/normal 4% demonstrate
the value of
Create happy/satisfied employees 4% implementing plans.
Benefit myself 4% Provide general
updates on
Required/policy 3% legislative changes
Finances/value/savings that clients should
3%
for the company be incorporating
Peace/ease of mind 3% into their business
planning.
0% 5% 10% 15% 20% 25% 30%
Base: Total answering who offer health benefits/wellness; N=452; *Note: Responses under 3% not shown
Manulife Financial Small Business Research Report Selling on value 7TOP TIPS FIGURE 3
Teach clients What obligation do you feel you have
how stress can
affect employee
to your employees?
productivity and I feel an obligation to The only real obligation
how to identify it in take care of the people I feel to my employees
their workplaces. who work for me is to pay them
Offer mental health Neutral No answer
seminars for your 1%
clients’ employees
to help reduce the 2012 63% 27% 9%
taboo around the
issue and teach
2011 86% 9% 4%
people where they
can turn for help.
Provide access 0% 20% 40% 60% 80% 100%
to financial Base: All respondents; 2011 N=1,005; 2012 N=1,101
professionals for
education and
advice on common
return on investment is harder to justify, such as leading cause of disability worldwide.3 Today, only
financial concerns of
a benefits or retirement plan. one-third of those who need mental health ser-
employees, such as
Generational differences in the workforce may vices in Canada actually receive them.4 With so
debt reduction and
also be shaping this change, says Norris-Lue. many Canadians working for small businesses,
retirement planning.
“There are more gen Y people coming into the owners have an opportunity to improve these
Talk to insurance workplace who sometimes have attitudes like numbers by removing stigma for their employees
carriers about ‘I don’t need you to take care of me; just give and educating them on mental health issues.
programs that can me cash.’ It might be what’s being reflected in The challenge is that employers often do not
help provide mental these results and part of why owners are saying recognize their employees’ stress or feel that their
health and wellness it’s not as important as it once was.” stress is small relative to what a business owner
information to The economic and demographic changes are experiences daily, says Kandy Cantwell, manag-
employees. causing employers to ask for more value from their ing partner, Montridge Financial Group Ltd. in
benefits and retirement plans, according to the Vancouver. So advisors should be explaining to
advisory board members. Advisors can use such them what stress is, how it can affect employee
requests as an opportunity to teach small business productivity and how to get people access to care.
owners how these plans can mean more tax-free First, advisors should demonstrate the link
compensation dollars in the pockets of employees, between employee stress and organizational
access to better retirement savings products, less health costs—either with general industry data
absenteeism, reduced drug and disability costs on disability claims or, keeping privacy legis-
and more loyal employees. One idea is to provide lation in mind, aggregate utilization data for
2. Industry Canada/Statistics
Canada (2011): http://www.
a comparison, showing the compensation dif- a company’s employee group. If an owner is
ic.gc.ca/eic/site/sbrp-rppe.nsf/ ference between an employee receiving straight receptive to the data, a conversation on preven-
eng/h_rd00033.html
salary and an employee receiving the additional tion can take place. Advisors can discuss strate-
3. World Health Organization,
WHO initiative on depression
dollars provided by benefit and retirement plans. gies with a small business owner for reducing
in public health: http://www. stress, says Joel Rose, principal, usefulideas
who.int/mental_health/
management/depression/
Address stress in Toronto. “Make some holistic suggestions.
definition/en/ and mental health Do they have team meetings? Do they bring
4. Canadian Community Health Consistent with last year’s results, small business in lunch on certain days? Things like that can
Survey Mental Health and owners continue to believe that their employees’ make an environment better and it shows the
Well-being: http://www.
statcan.gc.ca/pub/82-617-x/ stress levels are not a problem: only 12% acknowl- employer cares.” When the owner is ready to
index-eng.htm and CAMH edge that stress is a problem and 59% say it is take it a step further, advisors can suggest that
Facts: http://www.camh.ca/
en/hospital/about_camh/ not. But the World Health Organization disagrees. employers implement stress and healthy eat-
newsroom/for_reporters/ By the year 2020, depression—a serious mental ing seminars, financial and retirement planning
Pages/addictionmental
healthstatistics.aspx health issue—is expected to become the second meetings, and employee assistance programs.
8 Selling on value Manulife Financial Small Business Research ReportS E C T I O N two
Prospecting
new clients
L ike their small business clients, advisors
must keep prospecting for new clients
in order to grow their businesses. The survey
But referrals don’t flood in simply because an
advisor is part of the industry. Advisors must
build relationships, say the advisory board mem-
data show referrals are by far the main driver of bers. For example, Pritchard, who focuses on
growth. Three-quarters (73%) of respondents retirement plans, fosters relationships with Cana-
say they rarely meet with a business advisor who dian and U.S. consultants with expertise in the
is not recommended to them. When they are small case life and health market who will direct
seeking trustworthy advice for their business, clients to him when looking for pension exper-
78% turn to a professional reference, 73% ask tise. Glendinning is deeply involved in a local HR
a personal contact and almost half (49%) turn organization as a way to share her knowledge
to an industry association for a recommenda- and create prospecting opportunities.
tion. Not surprisingly then, 37% of small busi- Rose and his team prefer a more direct route.
ness owners/managers who have a person they “When our advisors go to see customers, they
Photo: iStockphoto
consult regarding employee benefits and retire- introduce themselves and say that all of our
ment plans found their current advisor through work depends on referral. Then, in the discus-
a personal reference, while another 30% did so sions with the client, we’ll say ‘Our customers
through a professional reference. who referred us like this element of the plan.’
Manulife Financial Small Business Research Report Prospecting new clients 9quoted The referral is part of the conversation and our more likely than senior managers to say they
credibility,” he explains. “When we’re delivering would look to their accountants (23% vs. 14%,
“We need to
the plan, we ask them if they could introduce respectively), while senior managers are signifi-
us to somebody else. Also, when we do their cantly more likely than owners to say they would
reviews every quarter, we ask if they know of look to an advisor (30% vs. 18%) for advice.
translate the anyone else who we can work with. And most While senior managers tend to rely on advi-
benefits line of the time there’s another name.” sors, owners still appear to be leaning on their
Advisors can also use social media to be accountants. So to gain access to owners, advi-
entry on the proactive about referrals, says Michael Horne, sors need to nurture a close relationship with
books so the partner, Carleton Financial Group in Ottawa. accountants. “We have to be the trusted advi-
accountant “From a prospecting standpoint, LinkedIn is a sor to the client’s trusted advisor,” says Michael
will see great avenue to find out who your clients are Wortsman, associate broker, Creative Planning
connected to and then ask for an introduction Financial Group in Toronto. “We need to be the
something at a semi-annual or renewal meeting,” he says. expert source for an accountant when it comes
more than to benefits and retirement plans.”
the rate. Ally with accountants Being a go-to contact for an accountant
”
Small business owners/managers value and rely should include sharing expertise on HR strate-
on their accountants. The survey found 21% gies, workers’ compensation issues, disability
—Roger d’Eschambault,
dElta Benefits Inc. of respondents turn to accountants most fre- management concerns and retirement savings
quently when they need advice or assistance trends, says d’Eschambault. “We need to trans-
on employee benefits issues. Meanwhile, the late the benefits line entry on the books so
same proportion (21%) look to a benefits advi- the accountant will see something more than
sor. Interestingly, the results show owners are the rate,” he says. Eventually, when the small
FIGURE 4
When looking for trustworthy advice for
your business, where do you turn?
Ranked first Ranked second Ranked third
Professional reference 37% 28% 13% 78%
Personal reference 32% 27% 14% 73%
Industry association 11% 16% 22% 49%
Internet search 8% 7% 14% 29%
Industry conferences
28%
and events 5% 9% 14%
Government agencies 5% 6% 3% 14%
Boards of Trade/
5% 2% 3% 10%
Chambers of Commerce
Advertising 4% 2% 2% 8%
Social media
(i.e., LinkedIn/Facebook) 3% 1% 1% 5%
Hard copy directory
(e.g., Yellow Pages) 1%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Base: All respondents; N=1,101
10 Prospecting new clients Manulife Financial Small Business Research Reportbusiness owner realizes her accountant is getting agrees clients are not using the Web to choose TOP TIPS
input from an expert source, she will search out an advisor or buy a health benefits or retirement
that advisor. plan, but it’s an ideal place for an advisor to be Develop a way to
Engaging an accountant has the added positioned as a thought leader. “Part of it is having ask existing clients
benefit of reinforcing an advisor’s expertise those thought leadership pieces with your name for referrals that
to the client. “Ultimately, when the client sees attached to them, whether it be through blogs, feels genuine and
that you and the accountant are aligned, in newsletters or [other social media channels],” she comfortable for you.
the future he’ll be even less inclined to say ‘I’d explains. “Clients are not out there looking for Leverage social
better check with my accountant,’ because he you specifically, but they may find pieces that you media—such as
already knows intuitively that you are on the have [published] in different places. You’re build- blogs, Twitter,
same page,” says Pritchard. ing a connection, demonstrating how you think, LinkedIn and
Aligning yourself with an accountant can and providing a clearer picture of who you are.” Facebook—to
lead to strong referrals. This strategy can also Combining these new media approaches show you are a
be applied to other key professionals in a small with regular seminars or mailed newsletters will thought leader
business owner’s network, such as lawyers, HR expand your network and, in turn, your potential in small business
professionals and bankers. prospect list. group benefits and
retirement plans.
Be a thought leader Create community connections Get involved
Small business owners/managers look for Community social groups, charities and associa-
in volunteer
expertise, experience and knowledge in an tions all offer ways for advisors to grow and build
organizations in
advisor. The study found those are the top qual- their network when prospecting new clients.
your community
ities that almost half of respondents (46%) look “How the community sees your organization is
to give back and
for in a benefits and retirement expert. Owners very important,” says Joël Drolet, general man-
create goodwill for
need to trust the messenger. With social media ager, Goguen Champlain Financial Services Inc.
your company.
and traditional communication methods, there in Dieppe, N.B. “We do a lot of work in the
are more ways than ever before for advisors to community with charity organizations. Our staff Become an active
demonstrate their expertise. gets really involved and that builds profile. So member of your
Rose knows that clients are not surfing the Web when you go to meet a new client—and we get industry or local
for their next advisor. In fact, the survey found most of our new clients through referrals—they small business
only 29% use the internet when searching for an always have a warm feeling when they see us.” associations.
expert. However, they often visit an advisor’s site Advisors can participate in fundraisers, com- Cultivate
before or directly after a meeting for confirma- munity environmental projects or local business relationships
tion of experience and professionalism. Norris-Lue improvement associations. with respected
HR professionals,
bankers and other
FIGURE 5 consultants.
When it comes to employee benefits issues, who do Connect with one
or two accountants
you turn to most for assistance and advice? who specialize in
Accountant 21% your niche market.
Become their
Benefits advisor 21%
go-to expert for all
Financial advisor 10% questions related
Insurance broker 10% to retirement and
benefits. Offer
Someone else 5% to do seminars
Lawyer 2% for their clients’
Banker 1% employees.
No one/none of the above 8%
Do not offer any
employee benefits 21%
0% 5% 10% 15% 20% 25%
Base: All respondents; N=1,101
Manulife Financial Small Business Research Report Prospecting new clients 11S E C T I O N t h r ee
Building
relationships
S trategic business planning can only
occur when a small business owner
has time to spend on big picture planning.
Creative client contact
A typical working professional receives, on
average, 110 emails per day, according to recent
According to the survey, 30% say finding that data from a technology market research firm.5
time is a problem. Advisors who are nurturing So small business owners don’t need more
relationships with prospective and existing clients daily or weekly email from their advisors. The
have to be sensitive to the limited amount of time survey respondents say they hear from their
a small business owner has available. Creative benefits advisor about every three (28%) to
Photo: iStockphoto
communication methods, offers of additional six (21%) months, and that they currently
support, and education on human resources receive information through physical mail
and industry issues can help maintain a relationship (53%) or telephone (48%) and in-person
without dominating a client’s limited time. (34%) meetings.
12 Building relationships Manulife Financial Small Business Research ReportWhile quarterly or semi-annual meetings with Build a fence Social Media
clients are necessary to meet clients’ service Small business owners/managers are content
expectations, some advisors are finding it doesn’t hearing from their advisor on relevant issues Cheat Sheet
always have to be an in-person meeting—at least every quarter. So how can an advisor stay top- How to use
for established clients. At the beginning of a new of-mind without being in touch too often? One the Web’s
client relationship, more frequent face-to-face way is to be a point of contact or source for other most popular
meetings are essential, say the board members. products and opportunities. social tools
“[Established] clients are very receptive to Whether you specialize in benefits or retirement
• Blog: Post thought
not seeing you in person,” says Rose, who uses or do both, offer services such as buy-sell agree-
leadership pieces at
GoToMeeting and Skype as conferencing tools. ments and personal and corporate life insurance,
least weekly on hot
Goedecke has also had success conducting says Christian Viau, owner, Placements-Vie Inc. in
topics in your area
meetings with GoToMeeting, particularly with Pointe-Claire, Que. “By doing so, you stay relevant
of expertise.
his remote clients. It works so well, he explains, to the client and eliminate competition.” It’s more
because it’s efficient and the interactive nature difficult for your client to move to another advisor • Twitter: Post links
of the tool makes it more engaging for clients. “I when you are so deeply involved in their business. to your blog here
have found it very valuable in retaining clients. I Cantwell says advisors can run into trouble or share other
do make a point of getting face time with them, trying to be “all things to all people,” so another interesting reads you
but I’m no longer anxious that I haven’t seen way to make yourself invaluable to clients is to find in the news and
them this month,” he says. The next genera- become a bridge to other experts. “I’m an expert from other experts.
tion of business owners will be even more com- in benefits, but I’ve got colleagues in our office • LinkedIn: Join
fortable with this type of communication, adds who are experts in pensions, buy-sell, share- relevant groups (such
Horne, so if advisors want to stay relevant they holder funding and so on,” she says. The group as an HR or small
should be embracing new technology today. of experts can extend beyond total compensa- business group) and
Social media—such as Twitter, LinkedIn and tion into legal, HR, banking, investments and spend time engaging
Facebook—is a low-cost way for advisors to get small business areas. in conversations and
involved in modern forms of communication. In The area in which small business owners answering questions
fact, 4.7 million LinkedIn members are employed need the most support is in HR, says Viau, who to demonstrate your
by a small business. Being active on the site can believes advisors have a significant opportunity expertise. If you have
generate warm leads, identify professional con- to add value to small businesses by being a a blog, you can post
nections and even recruit talent. Wortsman knowledge hub for HR issues. Glendinning has updates here as well.
believes the primary reason for using these tools done just that by joining her local HR association.
is not necessarily for securing new clients. “But “Being a member gives me enough information • Facebook: While
it is important in terms of maintaining your rela- so when an employer is telling me they are going this tool is a little
tionship with existing ones,” he says. While the to do something with an employee, I know to more personal, use
survey found that only 21% of small business bring to their attention that they may need to it to showcase the
owners say they would be likely to communicate get advice prior to making a final decision,” she personality of your
with their advisor via social media, there is no says. “[Also,] I’ve aligned myself with an expert firm with photos
denying that this form of communication will who has a consulting firm, and she deals with and behind-the-
continue to grow and gain importance in the certain issues for me. Providing that access has scenes thoughts
coming years. added a lot of value for my clients,” she says. from you and your
staff. Include links
to your website,
blog, Twitter and
FIGURE 6
LinkedIn accounts.
Being able to spend time on the ‘big picture’ Facebook facilitates
event invitations for
Problem Neutral Not a problem No answer 1% employee meetings,
re-enrollment
2012 30% 30% 39% and volunteerism
opportunities.
2011 36% 28% 36%
0% 20% 40% 60% 80% 100%
Base: All respondents; 2011 N=1,005; 2012 N=1,101
Manulife Financial Small Business Research Report Building relationships 13TOP TIPS FIGURE 7
Maintain contact
with clients through Communication preferences
emails, newslet-
28% 28%
ters or face-to-face Currently receive
26% communications
meetings every 25%
three to six months. 22%
21% Would like to
Embrace new 20% be contacted
technology, such as
17%
online video confer-
15% 15%
encing, as a more
efficient way to keep
11%
in touch with clients. 10% 10%
By the end of 2010,
6%
there were 152 5% 4%
million blogs on the 3%
2% 2%
internet. Update
your blog twice a 0%
Weekly Monthly Every 3 Every 6 Once Only at Other
month with key
months months a year renewal
benefits informa- or so or so time
tion to highlight
Base: Respondents who have an advisor; N=457
your expertise.
Use Twitter or
LinkedIn daily to stay
top-of-mind with
Be a host FIGURE 8
Events are a fun and efficient way of building
your clients in a less
relationships, networking and providing exper-
How likely would you be to use
formal manner.
tise to clients. Members of the advisory board social media to communicate
To stand out in the host breakfast and lunch seminars on benefits with your advisor?
technology age, and retirement issues, as well as more involved
send out hand- events on HR, legal or industry-specific topics. Very likely
written holiday or No answer
For the past 10 years, d’Eschambault has Total likely
birthday cards for been throwing a biannual half-day event for Uncertain 21%
a personal touch. clients called the Institute of Healthy Human 3% 5%
7%
In addition to ben- Resources. He brings in inspirational speakers,
efits or retirement celebrities and HR experts for timely lectures, Somewhat
and he takes to the stage to speak about group likely
expertise, offer other
16%
services (estate plan- benefits news. Clients learn, network with each
ning and buy-sell other and enjoy themselves, he says.
Norris-Lue, on the other hand, finds value Not at all Not very
agreements) to build likely likely
a fence around your in holding multiple smaller, sector-specific 24%
45%
clients. events to address particular concerns with
industries, in addition to pulling together
Host educational
general seminars on group benefits and
networking events
retirement. Topics include cost containment,
for your clients and
employee engagement, mental health, sub-
contacts to mix and Total not likely
stance abuse, and health and disability man- 69%
mingle while learn-
agement solutions. Not only does Norris-Lue
ing about key new Base: Respondents who have an advisor; N=457
invite those directly responsible for oversee-
issues related to
ing the benefits and pension plans, she also
benefits and retire-
invites the owners or key decision-makers.
ment plans.
This ensures she stays connected to all par- someone new comes in [to the business] you
ties involved. Horne agrees with this approach. can be out of the picture. Keeping the relation-
5. The Radicati Group (April 2010):
http://www.radicati.com “No matter how good a job you’re doing, if ship layered is key,” says Horne.
14 Building relationships Manulife Financial Small Business Research ReportS E C T I O N fo u r
The role and importance
of retirement plans
C anadians are not saving enough for their
retirement. The sixth annual Benefits
Canada CAP Member Survey asked non-partic-
of participants).6 The average person saves less
than 3% of their annual disposable income,
according to Statistics Canada.7
ipants and participants of employer-sponsored Overall, employers are not increasing pension
retirement plans why they don’t save more. coverage, say recent Statistics Canada data. The
Both groups had similar reasons: “Currently percentage of the paid labour force covered by
just getting by financially” (43% of non-par- a registered pension plan (RPP) is very low at
ticipants and 33% of participants), general 38.8% and continues to decline.8 Since many
living expenses (40% of non-participants and Canadians work for small businesses, there is an
55% of participants), credit card debt (28% opportunity to help employees do a better job
Photo: iStockphoto
of non-participants and 19% of participants), of saving for retirement. For advisors, the oppor-
mortgage payments (18% of non-participants tunity is showing owners why offering plans will
and 24% of participants) and “not a priority at create more satisfied employees without affect-
this time” (19% of non-participants and 14% ing the bottom line.
Manulife Financial Small Business Research Report The role and importance of retirement plans 15TOP TIPS FIGURE 9 Focus on the value
More than half of small business owners/manag-
Advise clients to Having a company-sponsored ers (58%) do not feel they have a responsibility
use retirement
plan contributions
retirement plan is as much to ensure employees save for their retirement. Of
as an alternative for my benefit as for my those who do offer a plan, they say it’s as much
to salary increases employees for their own benefit as it is for their employees
or bonuses. (79% of those who offer a pension plan and
Total disagree: 21% Total agree: 79%
77% of those who offer a group RRSP).
Knowing that a Strongly
disagree It seems employers need additional education
retirement plan on how retirement plans can improve employee
8%
may be further satisfaction and loyalty, attract top quality tal-
down on the ent and provide tax benefits. The top motiva-
priority list for Somewhat
disagree tors for putting a plan in place for those who
your clients, 13% Strongly already have one is to encourage retirement sav-
pay attention agree ings (22%) and retain employees (21%). Only
to what stage 44%
12% say they offer a plan to stay competitive in
they are at with an industry, and 10% say it’s to attract better
Somewhat
their business agree employees. Those who do not offer a plan say
development so 35% they would be motivated to do so in order to
you can identify reduce turnover (43%), benefit from tax incen-
an appropriate tives (38%) and attract top-quality staff (31%).
time to start a Clearly, many employers don’t recognize
discussion about that retirement plans can be used to create tax
Base: Those who offer an employee pension plan; N=130
retirement plans.
Take time to
thoroughly FIGURE 10
explain the tax
benefits of a What prompted you to offer an employee pension plan
retirement or or group RRSP?
pension plan to
your clients. Encourage retirement savings/planning/
22%
concern for future of employees
Use an anecdote
or story about Employee retention 21%
another client Industry standard/keeping up with other
companies/be competitive in industry 12%
to show how a
Employee recruitment/ 10%
retirement plan attract better employees
can increase
Union 6%
employee
satisfaction and Employee morale/happy/content
5%
employees/better for the staff
attract and retain
Employee request 4%
top talent.
Good/benefit for long-term employees 4%
Right thing to do/good idea 4%
Was already in place 4%
Employee loyalty 3%
Offered by banner/franchise agreement/
corporate policy 3%
Stability 3%
Base: Total answering who offer pension plans/group RRSP;
N=189; Note: Responses under 3% not shown 0% 5% 10% 15% 20% 25%
16 The role and importance of retirement plans Manulife Financial Small Business Research Reportadvantages for the company and the owner. employee satisfaction longer than a one-time TOP TIPS
Rose suggests explaining to owners that a com- bonus will. The CAP Member Survey found that
Get creative with
pany group RRSP is an effective way for them a strong majority (71%) of those surveyed said
how employer
to max out their personal contribution limits, they think of their employer more positively
contributions are
while the company plan picks up the admin- because of the retirement plan offered as part
calculated. Link
istrative costs. Profit-sharing plans are a great of their compensation.9
them to years
tool to boost employee satisfaction and morale, Language plays a key role in addressing the
of service or
permitting employers to offer bonuses without different demographic groups in an organiza-
percentage growth
incurring the significant payroll taxes that exist tion, too. “If you get up in front of a group of
of the company
in some provinces. 20- and 30-year-olds and talk about retirement
to help employers
To reduce turnover as well as attract and retain savings, they may not be interested in ‘retire-
control the cost
highly skilled employees, link the employer con- ment’ but ‘savings’ may be of interest,” says
of a plan.
tributions to the growth of the company, says Norris-Lue. This means advisors are better posi-
Pritchard. “For example, if you tie employer tioned to approach the topic in a more targeted Identify the
contributions to the performance as a business, manner. For example, when Goedecke conducts demographic
the financial cost of the contribution is covered retirement seminars for younger groups he asks segments in
and sponsors also ensure employees have the the question: How do you gain financial inde- each of your
necessary assets when transitioning [to retire- pendence? “You have to make it real to them clients’ employee
ment]. Basing the level of contributions on years and part of their day-to-day goals instead of groups. Customize
of service is also an effective tool,” he explains. some objective way down the road.” communication
Service-based contributions with increases over about the
time often help with the attraction and retention Seize the opportunity retirement plan for
of employees, since they encourage employee The recent media and government attention each of these to
loyalty through financial incentives. It is much on pooled registered pension plans (PRPPs) make the message
more effective than simply increasing salary or creates an ideal opportunity for advisors to more effective.
providing cash bonuses. discuss retirement issues with their clients. Only Take advantage
But connecting employer contributions to 16% of respondents say they are familiar with of the news about
growth may feel like too much of a financial the new retirement savings vehicle targeted at PRPPs to discuss
obligation for some small business owners. The small businesses. retirement plan
board agrees that perceived cost of a retirement Even though few small business owners are issues with your
plan is one of the main reasons why owners do aware of PRPPs, the related media attention clients.
not want to offer a plan. To contain employer on retirement coverage is already generating
costs, advisors can offer certain retirement plan leads for some of the advisory board members.
options that limit employer contributions (such “It’s brought [these issues] to the forefront. I’m
6. Benefits Canada, 6th Annual
as a group RRSP) to cost-sensitive clients that still having meetings where companies in industries CAP Member Survey (2011):
offer employees the benefits of a convenient and that typically wouldn’t even entertain a pension http://www.benefitscanada.
com/pensions/cap/2011-cap-
low-cost savings program. or group retirement plan want to know more,” member-survey-meeting-
says Horne. From there, it’s about educating needs-across-the-spectrum-
28257
Language matters the client on which retirement plan model is
7. Statistics Canada, Economic
How advisors position the investment in a retire- best for them. indicators, by province
ment plan can make all the difference. A retire- Despite the conversation happening around and territory (monthly and
quarterly) (2012): http://www.
ment plan does not produce the same employee PRPPs, this dialogue might not be reaching the statcan.gc.ca/tables-tableaux/
morale boost that a health plan or other perks intended audience. The survey found those sum-som/l01/cst01/indi02a-
eng.htm
can have, says d’Eschambault, so it can be dif- who are familiar with PRPPs and who are the
8. Statistics Canada, Pension
ficult to convince some owners it’s worth the most likely to say they would set up a PRPP Plans in Canada and Labour
investment. Goedecke agrees, but suggests already have a pension plan (50%) or a group Force Survey (2012): http://
www.statcan.gc.ca/daily-quo-
positioning the costs of the retirement plan RRSP (54%) in place. But Pritchard believes tidien/120525/dq120525a-
against those other perks. “If it’s three to four advisors shouldn’t be discouraged by those eng.htm
percent to put in a plan or give a bonus, argue results. “At least we’re getting free press, and 9. Benefits Canada, 6th Annual
CAP Member Survey (2011):
that a [retirement plan] is cheaper because the I think if we ignore the debate it will be at http://www.benefitscanada.
owner will have cost certainty and won’t face our peril. Use the PRPP as an opportunity to com/pensions/cap/2011-cap-
member-survey-meeting-
the uncertainty of an annual renewal,” he says. discuss all the potential options with a client needs-across-the-spectrum-
Furthermore, a retirement plan will pay back in or prospect,” he says. 28257
Manulife Financial Small Business Research Report The role and importance of retirement plans 17SECTION five
Maintaining the
future of benefits plans
T he biggest worry small business owners
have when it comes to their benefits plans
is controlling future cost increases. In the sur-
has high claims, for example, an advisor can
track that amount monthly, and then update
the client quarterly on how this compares
vey, three-quarters (75%) of the respondents to previous time periods. This strategy helps
agree with that statement. Of those with a plan, clients understand the reasons for the cost
dental care (19%) and prescription drugs (17%) increases and prepares them for the renewal
are described as the main cost drivers of the period. Bruno has used this method to deal
plan. Interestingly, 13% say they are unsure with high renewals. “I had a client facing a
which part of their plan is pushing up costs. very large renewal. I showed how claims had
Advisors can address these concerns and driven that year’s costs and they asked what
deliver extra value by being attentive to each we could do next year if things continued the
Photo: Veer
client’s problem areas. In cases in which cli- same [way],” he says, which presents a chance
ents don’t know what their cost drivers are, an to discuss prevention strategies for the busi-
advisor can quickly let them know. If a client ness, such as wellness programs.
18 Maintaining the future of benefits plans Manulife Financial Small Business Research ReportFIGURE 11 quoted
What criteria do you look at when making a decision on
whether to provide a benefit to employees? “Most
employers
Cost per employee 72% like to know
Quality of plan and features offered 57%
what’s
available
Level of coverage 51% for them.
They may
Anticipated future costs of the plan 50%
not choose
Cost as a percentage of payroll 49% it, but it
gives them
Ease of set-up 38% comfort
Internal administration costs
knowing
37%
they have
Financial stability and reputation
of the insurance company 37% options,
Amount of internal
and that if
administration required
37%
they need
Online services and customer support 21%
to fix certain
components
Other 10% in the plan
they can.
”
0% 10% 20% 30% 40% 50% 60% 70%
—Michael Wortsman,
Base: All respondents; N=1,101
Creative Planning
Financial Group
During a conversation about costs, what is a maintaining the ideal mix of offerings to employ-
client considering when trying to make a deci- ees. In the survey, the respondents say the most
sion about benefits? The survey found the high- important thing an advisor can do to help with
est proportion think about cost per employee a benefits plan, aside from cost, is provide the
(72%), followed by the quality of the plan or right coverage (9%) and customize it to the
features (57%) and the level of coverage (51%). employee group (8%). “Most employers like to
Despite so many respondents being concerned know what’s available for them,” says Worts-
about future costs, only 50% factor it in when man. “They may not choose it, but it gives them
deciding on benefits. comfort knowing they have options, and that if
Horne says an advisor’s role is to deliver on they need to fix certain components in the plan
those expectations by explaining what the cli- they can.”
ent is getting for the cost. Then dispel the cli-
ent’s belief that a health plan means constant Deliver high quality service
increases. He suggests explaining how costs can Being aware of and attentive to clients’ con-
be controlled through plan design strategies and cerns is a core part of client service. The survey
employee education. found that small business owners/managers
are overwhelmingly content with the service
Offer choice they receive from their current advisor. Almost
Concerns about costs are driving clients to ask all (94%) of those who offer benefits and who
for choice and flexibility in their benefits while have an advisor say they are satisfied with their
Manulife Financial Small Business Research Report Maintaining the future of benefits plans 19TOP TIPS FIGURE 12
e attentive to
B Satisfaction with current advisor on employee benefits
what drives costs
in each of your Very satisfied Somewhat satisfied Total satisfied
clients’ benefits
plans. Take a
proactive approach Following up on commitments 60% 34% 94%
to discussing these
at each meeting Ability to understand your
58% 36% 94%
so the client is business and your concerns
slowly prepared for
potential increases. Clarity of communication 55% 39% 94%
hen clients are
W
concerned about
Administrative support 57% 36% 93%
premium increases,
offer creative ways
to control costs Education provided on
your benefits plans 54% 38% 92%
through changes
in plan design
and employee Frequency of communication 50% 40% 90%
behaviour.
e prepared to
B Anticipating your
concerns/questions 45% 45% 90%
invest time into
potential and
new clients to Price/costs of plan 38% 52% 90%
teach them about
benefits and
retirement plans. Cost control 44% 45% 89%
Education can
go a long way in 0% 20% 40% 60% 80%
preventing other
advisors from
Base: Respondents who offer health/wellness/pension/group RRSP and have an advisor; N=336
poaching clients.
T horoughly
explain renewals.
It demonstrates advisor’s ability to understand their business service can be. When Glendinning speaks to
your expertise and and their concerns. An identical proportion potential clients, she is often surprised at the
the work you have are also happy with their advisor following up lack of education the prior advisor provided.
done, and teaches on commitments (94%) and the clarity of his “You teach them how the rates are calculated,
clients about how communication (94%) and administrative sup- explain a target loss ratio and what reserves
benefits work. port (93%). The area with the lowest satisfac- are, and go over administration costs,”
tion level—a respectable 89%—is controlling she says. Investing the time in instructive
costs. When asked if their advisor provides conversations with small business owners
strategies or suggestions for managing costs, goes a long way to showing them what good
82% said yes, although only 34% say it hap- service looks like—and hopefully will lead to
pens all of the time. The top suggestion given new clients.
was plan design changes (17%).
The advisory board members say their Educate during renewals
experience with clients often differs. “Most of Whether an advisor is working with existing
the time, prospects we approach are not really clients or shopping a case for a new one,
satisfied with what’s going on,” says Drolet, renewals offer an ideal opportunity for
indicating clients may not realize how good advisors to demonstrate their knowledge
20 Maintaining the future of benefits plans Manulife Financial Small Business Research ReportFIGURE 13
quoted
Why did you decide to find a new advisor?
Other advisors were offering
better benefits options 35%
“If you’re not
absolutely
Did not meet my expectations
loved, be
32%
prepared
Other advisors were offering
to lose your
better rates for plans 29% client. Being
kind of
Did not provide an adequate
level of service 28% satisfied is a
door opener
Did not provide adequate options/
27%
for anyone
suggestions on ways to control costs of plan
else.
Did not work in the best
interests of my company 18%
”
—Kandy Cantwell,
Montridge Financial
Group Ltd.
Provided no value 8%
Did not trust advisor 6%
Other 12%
0% 5% 10% 15% 20% 25% 30% 35%
Base: Respondents who have ever changed benefits advisors; N=153
and expertise while teaching small businesses Maintain top spot
about benefits plans. While small business owners appear to be satis-
“It’s your value proposition,” says Wortsman, fied with their advisors, they do switch. The survey
adding that reviewing how a renewal is found that 32% have changed advisors in the past.
calculated—including explaining the impact Larger companies (51 to 100 employees) are more
of their claims experience—shows the advisor likely to report having switched benefits advisors
has done the work for the client. Glendinning than employers with 10 employees or fewer (46%
adds that when shopping a plan, advisors can versus 24%). Reasons for switching include other
compare quotes to an existing renewal. “It advisors offering better benefits options (35%),
takes the conversation completely away from advisors not meeting expectations (32%) and
that dollar amount and puts it down to ‘What other advisors offering better rates (29%).
are the administration costs and what benefits Cantwell says both benefits and retirement
does the client get for that?’” In time, this advisors must ensure their clients are more than
strategy educates the client and protects them satisfied with their service or face the conse-
from other advisors who promise lower rates quences. “If you’re not absolutely loved, be pre-
by switching. They know to ask where exactly pared to lose your client. Being kind of satisfied is
the cost saving will come from, she says. a door opener for anyone else,” she says.
Manulife Financial Small Business Research Report Maintaining the future of benefits plans 212012
Advisory board
The 2012 Manulife Financial Small Business Research Report relied on the advisory board to help shape the
survey theme and interpret the results. We thank them for investing their time, breadth of knowledge and
expertise in this look at the small business market in Canada.
Sam Bruno Kandy Cantwell Roger d’Eschambault Joël Drolet
Life Insurance and Employee Managing Partner President General Manager
Benefits Specialist Montridge Financial dElta Benefits Inc. Goguen Champlain
Underwriters Group Ltd. Financial Services Inc.
Insurance Brokers
Pamela Glendinning Herb Goedecke Michael Horne Teresa Norris-Lue
President President & CEO Partner VP, Benefits
Glendinning Insurance Aero Corporate Benefits Carleton Financial Group Cowan Insurance Group
Services Photos: Johnny Lam, Dave Starrett
Drew Pritchard Joel Rose Christian Viau Michael Wortsman
Principal Principal Owner Associate Broker
Reuter Benefits usefulideas Placements-Vie Inc. Creative Planning
Financial Group
22 Advisory Board Manulife Financial Small Business Research ReportYou can also read
