Working in the employee benefits industry and managing a small business that employs 40 staff, provides me with a bird’s eye view of the latest trends in workplace health and wellbeing as both provider and consumer. The industry I work in is changing dramatically and until recently was almost exclusively serving compensation and benefits specialists working in large UK and multinational companies as these were the only firms with the resources to implement such programmes.
Fortunately, that was then and then is now and the employee benefits landscape now offers many more opportunities for SMEs.
Ordinary people are underinsured
When it comes to financial protection and healthcare support, the reality is that ordinary people are often the ones who are least prepared.
Low and middle income families tend to rely on state provision. And we know that is being scaled back to balance the government’s books. But in any case many recipients of state provision soon realise that what is provided is simply inadequate, particularly when it comes to death and disability benefits.
Financial protection for these families is generally pushed into the ‘can’t afford it’ or ‘don’t know why I need it’ box, yet the reality is that a young family will struggle to maintain their standard of living in the event that one of the main earners suffers from a long-term illness or injury, for example.
Lack of education is a clear contributing factor here. There just isn’t a mechanism to inform and educate on a large enough scale, to be cheap and easy for everyone to access. Money Advice Service gives a steer but is not a fulfilment mechanism. Tailored financial advice from an appropriate professional is generally only sought by those with significant wealth to manage, and protection of those assets in the event of death and disability then follows as a logic outcome of that wealth management advice.
This seems to be a worrying shortfall in important, sensible guidance for the people who need it most.
The workplace has a role to play
The workplace has a really important role in changing this and there are three key trends that are prompting a shift.
Firstly, as companies strive for productivity gains that will help them remain competitive, the health and wellbeing of their workforce begins to receive more attention. This is with regard to attracting and retaining talent in the business, and also in reducing time lost due to sickness absence. In short, when your people are your main asset it makes good business sense to invest in their wellbeing.
Secondly, auto-enrolment to workplace pensions is prompting employers to provide workplace benefits for the very first time. That’s a culture shift too for employees who suddenly see their employer as providing more than just employment. This means there are new employee benefit schemes being set up that can be expanded to provide life and extended sick pay cover.
And finally, technology is making it easier to communicate, compare and purchase products online and at a significantly reduced cost, both at a product level and for the implementers of such platforms, which is now filtering down to employer sponsored systems.
Trust in financial products is an issue that needs to be addressed head on. Payment protection insurance continues to cast a deep shadow. The employer’s endorsement after taking independent advice can have an important role to play in regaining some of that trust.
Shifting the employer from sponsor to facilitator
Rather than acting as a sponsor of benefits to staff, employers are now increasingly becoming facilitators, providing access to value for employees. The most likely scenario is the employer paying for the foundations and showing employees what they need to do to top up their cover to get a decent fit to their needs.
There are now a number of online tools available that allow employers to provide their people with access to recommended products at reduced group prices, as well as support and education that puts health and financial wellbeing firmly onto an employee’s agenda. The employer can then become the access point to a range of appropriate resources, importantly without taking the cost burden of providing a set level of benefit to employees. Of course the flexibility of this works well for employees too as within the workforce, there will be people at different life stages and with different needs and priorities.
Auto-enrolment is already compelling SMEs to introduce workplace benefits for the first time. SME owners and managers should keep an open mind about the world of employee benefits and explore the simple, cost effective options that are out there and which can provide great value to their people and the business.