Healthcare perks remain popular despite rising costs

Employers plan to maintain health and welfare benefits provision despite rising costs as they are key in attracting and retaining employees.

According to Mercer’s Pan-European health benefits report, an average of 5.3% of a company’s total payroll costs are spent on health benefits, rising to 7% in the UK.

Although the cost rose by an average of 5% per employee across Europe in 2007, the survey of 800 companies across 24 European countries found employers plan to maintain their spending programmes. Half of respondents said their costs had increased over the previous year, yet despite this, 41% said they were unlikely to make changes to their current programme.

More than half of European employees (57%) do not contribute towards the cost of such perks. 

The most commonly-offered health-related benefits by European employers is company sick pay, which is offered by 71%. This is followed by flexible working hours (575), health screening (53%),  income support for employees with long-term disabilities (51%), gym membership (33%), employee assistance programmes (29%)and smoking cessation (26%.

Steve Clements, principal at Mercer, said: “Over two-thirds of respondents said they would struggle to retain top-performing employees if they did not offer good health benefits. These programmes are particularly valued as a staff attraction tool by companies in emerging Eastern European countries where migration to western economies has produced a scarcity of talent. There is also evidence that health benefits often rank as the most highly valued company benefit in those countries where employees perceive national health provision is relatively poor.”