Insurers have a crucial role in helping HR justify health and wellbeing benefits spend, Graham Simons hears.
Health and wellbeing benefits are no longer a nice to have for UK plc and providing these benefits can help employers win in the war for talent.
As a result, organisation leaders are increasingly interrogating these benefits as they seek more bang for their buck, leading to deeper conversations about deploying resources more effectively.
The greatest resource a business can have is time, meaning data insurers and advisers can provide on the effectiveness of these benefits is more important than ever.
Health & Protection’s workplace wellbeing roundtable in association with Vitality heard organisations were taking a more holistic view of their staff.
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“This is because there is an ever-increasing number of challenges that are out there for their staff members,” said Incorporate Benefits head of wellbeing Andrew Magill.
“One of the things we’re trying to help them with is what can they influence, what can they support with, but also define and clarify what’s beyond their control.”
Magill added that at times clients want help understanding just what this is, meaning deeper conversations with clients are now needed.
“It used to be about free fruit on a Friday and having a running club,” Magill continued.
“We’re now having deeper conversations with regards to culture and leadership. What are the career progression pathways? What’s the onboarding journey for staff members? Because all of that deals with people and ultimately, we have to have a holistic wellbeing strategy to be able to support that.”
Confusion over options
The panel noted that with all their good intentions clients often have great aspirations of what they want to deliver to their workforce but can end-up getting a little bit lost.
“There’s such an array of options in the market,” said Nick Hale, founding director of Engage Health Group.
“There’s such an array of noise in the media, on social media, from advisers and from insurers about what they should and shouldn’t be doing that I think it’s quite difficult now for them.
“They probably need guidance more now than ever to cut through all the noise and work out how they deploy their resources in the best way.”
Though Hale also maintained the challenge can depend on the size of the organisation.
“The larger corporates have always had deep pockets,” Hale continued.
“They’ve also got a PR exercise that they’re running all the time in terms of how they’re viewed from the outside world – what their Glassdoor reviews are looking like, how are they perceived – so sometimes their motivation can be for the wrong reasons.”
Deploying resources effectively
For smaller employers the challenge is around deploying resources effectively, but the panel agreed a lot of smaller businesses have been squeezed tightly the last few years and are having to think carefully about how they deploy their resources in the right way.
Sometimes it can be a decision between maintaining jobs for people or adding benefits.
However, Gallagher head of wellbeing Andreas Hunter added that the resource customers will often battle against is time.
“An awful lot of the teams we deal with have significant challenges over where they are going to apply the finite resource that is their time,” Hunter said.
“On top of that, an awful lot of the time looking at benefits and wellbeing strategy is not at the top of their list because the other challenge is around doing it for the right reasons.”
Clients also need to understand what their business objectives are,” Hunter continued.
“What is their people strategy? What are they looking to do? Often we’re in a situation where they’ve been allocated a certain budget, the proportion of that budget being taken up by one very specific and an increasingly expensive benefit is materially impactful to the decisions they have to make.”
Aligning these benefits to the needs of the business is critical and there might be massive cost increases that do not align with where the business needs to go in the next two or three years.
So understanding the drivers to change within an organisation and how to align those with the benefits to support their workforce are vital.
War for talent
The price for not aligning these benefits to the needs of the business can be losing out in the war for talent, the panel agreed.
Attendees reported many of their clients were seeing employees moving jobs in a way that they never would previously – for better benefits.
“Traditionally, it was moving for more salary or for a promotion, but we’re seeing that being challenged, even with smaller businesses where employees are asking what they get when working somewhere,” Clare Dare, head of specialist consulting at PIB Employee Benefits said.
Dare added she has had conversations with firms who have had an about-turn in how they think about private medical insurance (PMI).
“I’ve had clients who were very anti-PMI for their workforce but suddenly they’re saying, they can’t get people to join unless they give them PMI,” she continued.
“It’s changing the conversation because they’ve got the cultural challenge of what do they stand for as a business, and then what are they going to give these people?
“That means they’re engaged and they stay with the employer because otherwise there’s no succession planning for a business that’s churning all the time.
“These are really fascinating times because employers are facing many challenges and it’s that pull and push of how much money they have got and what people want?”
Deeper insight to support HR in C-suite evidence
The greater costs and demands on health benefits for businesses means they are now coming under more intense scrutiny across organisations.
This means a divide has opened-up between HR and senior directors, with the C-suite now seeking to take a much more active role in questioning the benefits they are paying out for.
“In the past it was more a case of HR policing what the business was doing from a people perspective and from a cultural perspective,” Engage Health Group’s Hale said.
“HR looked after the insurances which were people related, but much more frequently I’m seeing directors suddenly stepping-up.”
Hale noted that having had tight controls on direct business costs, senior management are now wanting to understand the other elements not directly associated with day-to-day business, such as employee benefits.
This also means HR has a role to play in highlighting the value of these benefits.
“What we have now, to some extent, is uneducated directors stepping in and saying: ‘Wait a second, what’s going on? We need to cut this down’ without really understanding what the benefits are and what the return on the investment is,” Hale continued.
“It’s a lot of work really, for HR managers, directors and heads of people to go up the line and say these are the reasons why they’re doing it, it’s costing much more, but there’s all this great stuff coming from it.”
In terms of what insurers can do, the panel noted some justification of premium increases would be useful.
At present, advisers said, the claims management information shared is quite vanilla, showing which benefits were used this number of times, but this may not really mean anything to a client.
More advanced explanations could include market or societal factors, but it could also be a way of educating clients, such as outlining the value of interventions insurers have put in place over the last 12 months.
For example, giving a sense of what the premium could have been without the MSK network, the cancer pathway or the virtual GP would prove valuable – potentially highlighting that a 20% increase would have been as high as 45% or 50%.
Difficulties demonstrating ROI
However, as ever the goal of evidencing return on investment (ROI) is a critical one that is easier said than done.
Gallagher’s Hunter emphasised certain areas of wellbeing were extremely challenging to directly connect with ROI, but there are areas where things are more clinical and where those direct lines are easier to draw.
However, Hunter pointed out the firm’s US business benefitted from being able to work with lots of data.
“Some of the work we do there is around zones of profitability, where you can outline what you are experiencing versus what you would have experienced if you hadn’t undertaken these interventions,” Hunter said.
“That becomes much more powerful if you project forwards. If you’re reducing your costs by 2% this year that might not be something to celebrate, but if it’s 2% this year and that becomes 3% next year, and that’s 5%, you’re getting further away from where you are.
“Using a cone of probability showing where average is, where high is and this is how we hope to trend under that, you could highlight we believe this may save you X amount of money over the next three to five years.
“If you are able to show that instead of 27% of something, you’ve been experiencing 25% of something, that’s the kind of stuff that would make a difference and that’s the kind of language people at that level talk.”
Athos Rushovich, director for specialised health sales and dedicated distribution at Vitality, concluded: “The challenge, and what we’re all violently agreeing with, is that if we can find a way to monetise the benefits of wellness, it’ll make it easier for customers to understand, especially CFOs.”
Download the roundtable supplement by following this link.
