Most employers are keen to improve staff health and welfare, but are feeling the pressure to keep benefits costs down, says Debbie Lovewell
Overall, employers believe they have a role to play in looking after employees’ wellbeing. This view has remained fairly consistent over the past decade. In our healthcare research conducted in 2000, 82% of employers felt they had a social or moral obligation to help staff stay healthy. Nine years on, we find a much smaller proportion of respondents feel they should be responsible for promoting wellness among the UK population. This year, 54% of employers say they should be responsible for this; that figure was 49% in 2005, and 57% two years ago.
When it comes to promoting staff wellbeing, employers believe the medical profession or National Health Service and the government should take responsibility. This has changed little over the past five years, with employers consistently placing both entities above themselves when it comes to shouldering responsibility for the health of the UK population. But for any messages about health and wellbeing to have an impact, individual employees must want to make changes to their lifestyle.
It is perhaps not surprising, therefore, that just under three-quarters (72%) of respondents feel individuals should be responsible for improving their own wellbeing. Ensuring they are aware of the benefits of doing so and how they can go about it is key to any wellbeing strategy. Although the government and medical profession can pass on information on a wide scale, employers are ideally placed to help their workforce make day-to-day changes to their lifestyle and identify any problem areas.
And many appear willing to do so. Respondents’ priorities in this area have changed little in recent years. This year, the top three steps employers think they should encourage staff to take – achieving a sensible work-life balance, reducing stress and keeping fit – are the same as those cited by respondents in our 2005 research.
Helping staff to remain both mentally and physically well is likely to become even more of a priority during the recession as many organisations battle to survive, in many cases with an already reduced workforce.
There has been quite a shift in employers’ top priorities in providing health benefits over the past 10 years. Improving the health and welfare of staff and reducing sickness absence have both risen up the agenda, while being seen as a caring employer and improving staff retention have declined in importance. Back in our 2000 health research, for example, getting staff back to work (77%) and being seen as a caring employer (76%) were respondents’ top two priorities. This year, just 35% and 34%, respectively, cite these as key priorities.
Over the past five years, however, employers’ top three priorities have not changed, although there has been a shift in the importance attached to each. For example, in our 2004 survey, reducing absence and getting staff back to work as soon as possible were priorities for 47% and 44%, respectively. This year, 55% prioritise sickness absence and 35% prioritise getting staff back to work quickly. This suggests employers are putting greater emphasis on overall absence strategies with the aim of having fewer staff off sick long term.
Many employers appear to be meeting their aims, which suggests they are getting value from their healthcare spend. More than half (55%) say their healthcare benefits have helped to improve staff health and welfare, and 51% say they have helped them to be seen as a caring employer. Almost half say their healthcare perks have reduced sickness absence and helped staff return to work as soon as possible.
One-fifth also say their healthcare strategy has helped them control costs, which is likely to become an even greater consideration for many in the recession.
The recession is inevitably prompting employers to examine all areas of their benefits spend, looking for where they can make savings or control costs. More than half (54%) of respondents say they will be under more pressure to cut costs, and 12% say it will be harder to justify the cost of health perks. It can be difficult to prove a tangible return on investment (ROI) on some of the softer wellbeing perks, so HR and reward professionals may have to look for ways to cut costs to better demonstrate the perks’ value.
Boosting employee appreciation and takeup of perks is key to maximising their value for employers. Communicating benefits to raise awareness can therefore help employers to boost their ROI, so it is perhaps unsurprising that 24% say they will have to communicate more in order to obtain value.
Savings can be made in a number of areas when procuring healthcare perks without needing to cut the benefits offered to staff. With providers currently vying for business, reviewing the market, rebroking insurance perks and reviewing the fees or commission paid to brokers or advisers can often help employers to secure a better deal and get more for their money. However, organisations must be wary of advisers who are simply looking to churn business to earn commission from providers and employers.
One-quarter of respondents say the recession will have no impact on their healthcare spend. Perhaps this group is satisfied that they are getting the best possible deal on their healthcare provision and recognise the value of investing in employee health and wellbeing.
But many brokers point out that there is complacency in the market, with many employers spending more than they need to.
Not surprisingly, cost is by far the most important factor influencing employers’ decisions on whether to buy, or continue to offer, healthcare benefits. This has always been a key consideration for employers, particularly in terms of obtaining value for money and a good ROI, but the current economic climate has heightened the need to do so.
Many organisations have had to cut staff numbers because of the recession, and now face the urgent need to motivate and retain their remaining employees if they are to survive the economic storm with the talent necessary to build the business back up again on the other side. This may be why employee demand is behind 44% of respondents’ decisions to offer or buy healthcare perks.
Meanwhile, just under half (49%) say they buy or offer benefits because healthcare providers offer them. Competition is currently keen among healthcare providers, which has prompted some of them to introduce extras to their product offerings at apparently little, or no, extra cost to employers. This can enable employers to extend their package for staff, and influence their decision to select a particular product or provider.
Click on the links below for more sections:
Research: who are the respondents; key findings
Research: the package
Research: what impact health and wellbeing perks have on sickness absence
Research: strategies to deal with employee stress
Research: healthcare costs and calculating return on investment
Research: how employers deal with legislation change