With Madonna on tour again and bum-bags making a fashion comeback, it feels like 2020 is history repeating itself. Nevertheless, although Aon’s UK benefits and trends survey 2020, published in January, showed a lot of consistency, it also indicated some clear trends and changes, including an increasing interest in value-on-investment (VOI).
Prevention is always better than cure
When assessing return-on-investment (ROI), although the investment is predominately financial, the financial return might not be immediately visible. For example, an investment in a wellbeing programme targeted at improving musculoskeletal health might reduce long-term claim costs, but it may well only show itself over a two-year period.
Aon’s UK benefits and trends survey 2020 shows that, within the next 18 months, 59% of UK businesses will have a specific budget for their health and wellness programmes. There has also been a surge in employers saying that their highest area of spend is on initiatives and benefits that focus on education and prevention, presumably in part to reduce the cost of ill-health further downstream.
The impact of an investment in health can be exponential, and there is often a tangible, if not always quantifiable, value: the butterfly effect. Investing in employee wellbeing can help to improve talent retention and individual performance, which, in turn, impacts business outcomes.
There have been numerous studies showing a correlation between happiness and productivity, but it has also been argued that happier employees are more engaged, creative and collaborative, too.
Focus on communications
Investing in employee communications is one way of further enhancing the VOI of a benefits offering; simply put, if employees do not know about the benefits available to them, they will not use them.
Unsurprisingly, according to our research, 99% of businesses see the importance of increasing employee understanding and engagement with their benefits; however, only 34% have an engagement strategy in place.
Treating employees as consumers can be an effective method of improving communications; are the messages clear to understand? Are employers communicating enough? Are employers using the appropriate communication channels for their audience? Adopting a marketing mindset can help optimise a communications strategy; a recognition of this is a likely driver for many organisations seeking strategic communications support from benefit advisers and providers.
In the benefits space, employer-to-employee communications should, and do, extend beyond a focus on improving benefits take up. There has also been a notable increase in employers communicating their overall employee value proposition (EVP) to staff, and a corresponding increase in the organisations that believe their EVP has a positive impact on employee engagement (now 77%, up from 65% in 2019), retention (now 76%, up from 63%), and recruitment (now 78%, up from 70%). Although the immediate VOI is not visible, the increased engagement will likely correlate to an improvement in business performance.
It is clear from Aon’s survey results that employers believe that investing in communications is an effective way of boosting overall VOI with minimal additional cost.
There is a clear increase in the number of businesses measuring against the objectives of their benefits strategy; 91% of employers are now measuring their performance, in comparison to 86% in 2019, with more than half rating themselves as ‘somewhat successful’ at achieving their goals.
Value and performance are inherently interlinked; the results against strategy and the value provided to an organisation and its employees are just as valid as other, more tangible measures of ROI.
This is all united by the need for data; without baselines, key performance indicators (KPIs), goals and metrics, nothing can be tracked effectively. Perhaps, with this in mind, 2020 should be the year for data implementation and tracking, allowing employers to measure value against a wider range of relevant metrics to understand impact and shape future strategy.
Perhaps unsurprisingly in an uncertain economic climate, there is a distinctive theme of optimising value and looking beyond tick-box benefits.
Of course, it is hard to predict the future, although we doubt there will be an Oasis comeback tour any time soon, but it seems as though the biggest benefits trend for 2020 is the one found in data: proactive and preventative healthcare, targeted communications and quantifiable goals.
Benefits have been usurped, and data is king.
Mark Witte is head of health and risk and Sarah Robson is senior strategic consultant at Aon