The estimated cost to respondents of providing healthcare benefits (including the cost of insurance, adviser, consultant, administration and/or communication)
Less than 1% of payroll 21%
1-3% of payroll 33%
4-6% of payroll 13%
7-9% of payroll 1%
More than 10% of payroll 3%
Do not know 30%
Sample: All respondents (104)
The factors that influence respondents’ decisions to buy or continue to offer healthcare benefits
Reasonable cost 74%
To boost overall employee wellbeing 74%
Employee engagement 74%
To be seen as an employer of choice 72%
A desire to support employees 64%
The range of benefits offered by a provider 51%
To reduce sickness absence 50%
Their competitors offer them 45%
Staff want them 44%
They have always offered them 38%
To be able to offer rehabilitation 27%
Legislative requirements 24%
The need to support an increasingly diverse workforce 24%
The cost of benefits versus the risk of not having cover 20%
The need to tackle a specific requirement (such as musculo-skeletal issues) 16%
Legacy scheme from merged organisation 3%
Sample: All respondents (107)
Do respondents calculate the return on investment for their healthcare benefits spend?
They do not 69%
They do not but they are planning to 19%
They do 12%
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A third (33%) of respondents spend between 1-3% of payroll on providing health-related benefits for their workforce. A further 21% spend less than 1% of payroll on health and wellbeing perks, while 13% spend 4-6% of payroll.
The cost of providing healthcare benefits has remained relatively consistent over the years. In 2013, 20% spent less than 1% of payroll on providing health-related benefits, while 30% spent between 1% and 3%. Looking further back, in 2006, 26% spent less than 1% of payroll and 23% spent between 1% and 2% on healthcare benefits.
Cost has been the main influencer on employers’ decisions to buy or continue to offer healthcare benefits since this question was first asked 11 years ago in 2006. Back then, 80% of respondents cited this as their top factor, compared with 78% in 2011 and 2013, and 76% in 2009.
This year, cost ties for the top slot along with employee engagement and a desire to boost overall employee wellbeing. These have gradually risen up employers’ agendas when it comes to their healthcare benefits strategy.
Yet, despite the often vast sums this involves, the proportion of respondents that calculate the return on investment (ROI) on their healthcare spend has remained consistently low. Just 12% of respondents say that they currently calculate the ROI on this spend, compared to 7% in both 2013 and 2009, and 10% in 2011.
Over the years, a steady proportion of respondents have said that they plan to begin doing so, but this does not appear to have translated into action.
What respondents believe their organisation has a duty of care to encourage employees to do
Achieve a sensible work-life balance 84%
Take full holiday entitlement 69%
Reduce stress 67%
Visit healthcare professionals when needed in a timely manner 52%
Eat healthily 48%
Manage workplace relationships 48%
Keep fit 45%
Build emotional resilience 41%
Achieve financial wellbeing 39%
Go for health screenings 36%
Reduce presenteeism 29%
Use alcohol sensibly 28%
Tackle obesity 22%
Stop smoking 22%
Stop using illegal drugs or substances 20%
Other 3%
None of the above 1%
Sample: All respondents (105)
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More than eight in 10 (84%) respondents believe they have an obligation to encourage employees to achieve a sensible work-life balance. This has consistently topped respondents’ lists of their perceived duty-of-care responsibilities over the past 12 years, cited by 91% in both 2005 and 2009, and 80% in 2013.
Encouraging employees to take their full holiday entitlement, helping them to reduce stress, and guiding them to visit healthcare professionals when needed in a timely manner have also remained high on employers’ agendas in recent years.
What respondents feel their healthcare benefits have been successful in achieving
Being seen as a ‘caring’ employer 74%
Improving the health and welfare of staff 68%
Good employee engagement 57%
Getting employees back to work as soon as possible 53%
Providing a duty of care 53%
Being seen as an employer of choice 46%
Good staff retention 37%
Good staff recruitment 37%
Keeping sickness absence low 35%
Preventing future health issues for staff 35%
Reducing workplace stress 35%
Complying with health and safety regulations 30%
Reducing musculo-skeletal problems 29%
Improving productivity 25%
Controlling costs 14%
Sample: All respondents (98)
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Three-quarters (74%) of respondents cite being seen as a ‘caring’ employer as a key achievement of their healthcare benefits strategy. This achievement has typically ranked highly with respondents.
This is followed by the 68% of respondents that say their organisation’s healthcare benefits have been successful in improving the health and welfare of staff. This has also ranked highly among respondents’ key achievements over the years.
Getting employees back to work quickly and achieving good or improved employee engagement have also typically been cited as key achievements by respondents.
The actions respondents have taken in relation to health benefits in the past 12 months
Greater focus on communicating benefits 47%
Increased focus on mental wellbeing support 39%
Increased the number of health benefits they offer 27%
Took no action 27%
Increased focus on financial wellbeing support 22%
Increased the number of employees covered by health benefits 19%
Offered benefits through a staff-funded voluntary benefits scheme 9%
Introduced an excess on insurance-based benefits 8%
Extended health cover to employees’ families 6%
Introduced health benefits for the first time 5%
Started using a healthcare trust 4%
Placed health benefits within an employer-funded flexible benefits scheme 3%
Reduced the number of employees covered by health benefits 2%
Moved to a limited-term income protection policy 1%
Other 5%
Sample: All respondents (94)
The actions respondents are likely to take in relation to health benefits provision in the next 12 months
Greater focus on communicating benefits 63%
Increase focus on mental wellbeing support 52%
Increase focus on financial wellbeing support 45%
Increase the number of benefits they offer 44%
Take no action 11% (NB: this is updated from originals)
Increase the number of employees covered by health benefits 22%
Offer benefits through a staff-funded voluntary benefits scheme 13%
Place healthcare benefits within an employer-funded flexible benefits scheme 5%
Move to a limited-term income protection policy 4%
Introduce an excess on insurance-based benefits 3%
Extend health cover to employees’ families 3%
Introduce health benefits for the first time 2%
Start using a healthcare trust 2%
Reduce the number of employees covered by health benefits 1%
Restrict cover for some or all health benefits to employees only 1%
Decrease the number of health benefits they offer 1%
Other 6% (NB: this is updated from originals)
Sample: All respondents (94)
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Nearly two-thirds (63%) of respondents plan to put a greater focus on communicating their healthcare benefits in the coming 12 months. This comes after just under half (47%) said they have already done so in the past year. Given the cost involved in providing healthcare benefits to staff, ensuring they are aware of, and engage with, what is on offer is key to achieving an optimum return on investment.
Perhaps unsurprisingly, increasing their focus on mental and financial wellbeing support are among the most popular actions that respondents have both taken and plan to take. These issues have both risen sharply up employers’ agendas in recent years as many have recognised the advantages of a holistic wellbeing strategy and the irrefutable links between each strand.
The growing prominence of employee health and wellbeing for employers can also be seen in the proportion planning to increase the number of benefits they offer. More than two-fifths (44%) say they plan to do so in the coming year, while just over a quarter (27%) did so in the previous 12 months.
A further 22% say they plan to increase the number of employees covered by health benefits in the coming 12 months, which represents a significant rise on the 9% and 14% that planned to do so in 2009 and 2013, respectively.
Do respondents offer an integrated wellness strategy incorporating physical, mental, emotional and financial wellbeing?
They do 38%
They do not 31%
They do not but are planning on doing so 31%
Sample: All respondents (93)
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More than a third (38%) of respondents offer an integrated wellness strategy incorporating physical, mental, emotional and financial wellbeing. A further 31% that currently do not, meanwhile, are planning on doing so.
This reflects the evolution in what is meant by wellbeing that has occurred in recent years; even since we last carried out this research in 2013. Whereas wellbeing previously referred primarily to physical wellbeing, many have now recognised that the four pillars, physical, mental, emotional and financial, are so inextricably linked that it can be difficult to view each in isolation.
With all aspects of wellbeing known to impact key business issues, such as performance, productivity, engagement, recruitment and retention, employers that take a holistic approach will reap the rewards.
