FTSE employers spend a significant amount of money on risk-related benefits, as well as other forms of employee compensation.
Organisations are, more frequently, putting a spotlight on these benefits to understand the value for money they represent, but also how they help to mitigate risk.
To answer these questions, employers are increasingly turning to the HR analytics community to uncover relevant insights. This is typically achieved by simulating the likely implications of risk incidents and the consequences for risk-related premiums.
Analyse workforce data
To begin this process, the key is to analyse workforce data from three perspectives: behavioural, financial and performance.
Behavioural risk could involve the people employed by an organisation, what they do on the premises or how they deliver brand values. Financial risks can range from the cost of attrition to being exposed to liabilities, such as fraudulent or negligent activity. Performance risk relates to whether employees are providing the level of output required to meet objectives, for example sales targets.
Data analysed in these ways reveals far more about a workforce and the factors affecting it. From there, employers can move from reactive to proactive interventions.
Proactive interventions
Proactive interventions could include benefits such as employee assistance programmes (EAPs). These are typically designed to provide employees and their families with advice, information or counselling on a particular issue they are facing.
For example, take an employee who is suffering from stress. EAPs could give them access to resources to better manage the problem before it becomes a longer-term issue.
Another example would be the analysis of employee travel patterns and identification of any inefficiencies. This can be used to shape new policies and to achieve significant cost savings. The tax treatment of travel, both within a home country and for internationally mobile employees, can also be overlaid to expose any potential tax risks.
Ultimately, the aim is for employers to understand what risks their organisation could be exposed to and what benefits might help to minimise the likelihood of these happening. In turn, employers will be able to best optimise their spend on mitigating benefits.
Laurence Collins is workforce analytics director at Deloitte