The Cost of Not Offering Group Benefits: Why It’s More Expensive Than You Think

Let’s talk about what you’re not seeing on your balance sheet.

When business owners consider offering group benefits, the first question is almost always: “How much will this cost?”
But the better question is: “What’s the cost of not offering them?”

In today’s competitive labour market, skipping group benefits might save you money in the short term—but it’s costing you significantly more in employee turnover, reduced productivity, and missed recruitment opportunities.

Here’s a breakdown of the hidden costs you need to consider—and why Canadian employers are shifting their mindset.

Turnover is killing your margins

Replacing an employee in Canada can cost between 30% and 150% of their annual salary, depending on the role and seniority.

A 2023 Mercer report notes that voluntary turnover in Canada is on the rise, particularly among small and mid-sized businesses. Employees are leaving in search of employers who value their well-being—and benefits are a key part of that equation.

💡 Bottom line: Retention is cheaper than recruitment. A solid benefits plan reduces churn and protects your talent investment.

Recruitment is getting harder

In a tight labour market, benefits are a deal-breaker.
According to a 2023 survey by AgCareers, 63% of Canadian job seekers consider benefits a critical part of job selection, and that number rises in competitive or specialized industries.

You can’t compete for top talent without a compelling benefits story.

💡 Bottom line: No benefits = fewer applicants, longer hiring cycles, and more hiring costs.

Productivity losses add up.

Benefits like health, dental, and mental wellness support don’t just attract talent—they keep your people healthy and focused at work.

A Benefits Canada report found that 47% of Canadian workers rely on their employer’s benefits to support their health and well-being.

Employees without coverage often delay treatment or ignore symptoms, leading to absenteeism and presenteeism (being at work, but not functioning at full capacity).

💡 Bottom line: Offering benefits is a proactive investment in team performance.

You're missing out on tax advantages.

Many Canadian business owners don’t realize that group benefits are tax-deductible business expenses.

Health and dental premiums are generally not taxable benefits for employees, which makes them a cost-effective way to increase compensation—without triggering payroll tax or CPP increases.

💡 Bottom line: Group benefits are one of the most efficient compensation tools available to Canadian employers.

Brand perception matters.

In industries where your team interacts with clients or partners, benefits aren’t just internal—they send a message about your company’s values.

Would you want your best client to find out you don’t offer health coverage to your staff?

💡 Bottom line: Group benefits reinforce your brand as an employer of choice and a trusted business partner.

So—what’s the real cost?

The real cost isn’t the monthly premium.
It’s the hidden expense of losing talent, missing hires, lower productivity, and forfeiting tax advantages.

At Summit, we help Canadian business owners like you design benefits plans that fit your team and your budget. Whether you’re building your first plan or looking to improve an existing one, we’re here to simplify the process.

Ready to run the numbers?

Let’s explore what a group benefits package could look like for your business.
👉 Book a free consultation with our team

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