THE EFFECT OF COMPENSATION AND BENEFITS ON EMPLOYEE RETENTION IN THE CANADIAN EMPLOYMENT SYSTEM

BY

ONYEKA JOHN IKEOBI

onyekaikeobi@yahoo.com

LLBS/EMBA-HRM /005212/001124/000030

EMBA – EXECUTIVE MASTER OF BUSINESS ADMINISTRATION IN HUMAN RESOURCE MANAGEMENT (HRM) PROFESSIONAL CERTIFICATE PROGRAMME, 2024/2025 SESSION.

Abstract

This paper explored how compensation and benefits influenced retention in the Canadian employment system. Narrative literature review and secondary data methods were used to review peer-reviewed turnover research, Statistics Canada employment indicators, and Canadian federal labour policy documents. Literature reviewed revealed that compensation and benefits influenced retention when they were competitive, fair, transparent, accessible, and responsive to workers. Studies of turnover consistently reported that pay, job satisfaction, organizational commitment, working conditions, and career opportunities interacted with each other. Canadian-specific research found access to medical and dental benefits, paid vacation, paid sick leave, and job-related training changed based on employment type, sector, unionization rates, and job permanency. These discrepancies were significant as benefit inequalities disadvantaged part-time, temporary, younger, and non-union workers. The literature supported compensation and benefits being foundational to retention but unable to override poor management, unsafe working conditions, unfairness, burnout, or stalled career progression. Recommended practices included conducting market pay assessments, performing internal equity assessments, expanding access to benefits, clarifying benefits offerings, developing stronger training and promotion paths, and tracking retention metrics that connected total rewards to turnover rates.

Keywords: Compensation, Benefits, Employee Retention, Canada, Total Rewards, Pay Equity

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