Cost remains the dominant influence on employers’ decisions to provide healthcare benefits, but most still do not measure the return on their investment, says Debbie Lovewell
Since 2006, cost has remained the most important factor influencing employers’ decisions to buy, or to continue to offer, healthcare benefits. Cost and obtaining the best possible value for money has always been a key consideration for employers, never more so than during a period of such economic change.
The range of benefits offered by providers has also ranked consistently high over the years, this year appearing in second place. Providers that offer a range of products may be willing to negotiate deals with employers that take up more than one of these. This can be an attractive proposition for employers looking to provide a comprehensive package for staff, or to introduce something extra for their workforce while still keeping costs under control.
This year, the need to reduce sickness absence levels also appears high on this list, cited by 56% of respondents. High sickness absence levels can be a costly business for employers, often putting pressure on already-reduced workforces.
This year, the need to reduce sickness absence levels also appears high on this list, cited by 56% of respondents. High sickness absence levels can be a costly business for employers, often putting pressure on already-reduced workforces.
Slipping down the table slightly this year is the percentage of respondents that are keen to offer benefits because their competitors do. This year, 48% say this is the case compared with 56% last year when this was ranked the second most important factor in respondents’ decisions to buy, or continue to offer, healthcare benefits.
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Given the ongoing focus on cost, it is perhaps surprising so few respondents measure the return on investment on their healthcare spend. This year, 11% say they do so, which equates to just 15 respondents. Employers have had a poor record in measuring the business benefits in this area over the past seven years.
Despite the benefits of calculating value for money, it appears many employers are unlikely to do so any time soon. Some 21% of respondents say they plan to measure ROI, but this figure has remained fairly static over the past five years.
One hurdle may be the fact that factors other than healthcare benefits can affect issues such as sickness absence, employee engagement and productivity. This year, employee engagement or satisfaction levels, sickness absence levels and the level of claims on health insurance remain the top three measures used to calculate ROI.
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Employers have consistently taken some responsibility for their employees’ wellbeing over the past few years. More than a decade ago in 2000, Employee Benefits’ Health strategies research found that 82% of respondents believed employers had a social or moral responsibility to help employees stay healthy.
Employers believe there are a number of things they should encourage staff to do to help improve their wellbeing. For the third consecutive year, encouraging staff to achieve a sensible work-life balance is the most popular of these. Although this is ultimately down to the employee to achieve, getting this balance right can play a significant role in matters such as helping to reduce stress and improving staff productivity, engagement and morale.
This year, reducing stress has fallen to third place on the list of things employers believe they should encourage staff to do. However, just above this is encouraging staff to take their full holiday entitlement, which can be instrumental in helping to control employees’ stress levels by providing a break from work and an opportunity for rest and relaxation.
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At a time when many organisations’ reputations and branding are under close scrutiny, employers appear to be placing greater importance on demonstrating good practice in these areas. This year, being seen to be a caring employer, or to be providing a good duty of care to employees, is cited as the aim that respondents’ healthcare benefits have been most successful in achieving.
Encouragingly, employers also believe their healthcare benefits have been effective in improving the health and welfare of employees. Although most respondents do not formally measure the return on investment on their healthcare benefits spend, anecdotally it appears they can see their strategy is going some way to achieving its aims.
Improving employee engagement and helping staff to return to work quickly also appear among the top aims that respondents feel their healthcare benefits have been most successful in achieving.
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Read more Healthcare research 2012