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Colin Fitzgerald, Distribution Director, Legal & General Group Protection, speaks to Laura Matthews, Senior Wellbeing and Benefits Consultant, Barnett Waddingham LLP.
In my last article for Corporate Adviser, I shared insights from a series of SME interviews we conducted this year. These in-depth interviews with employers across a range of SME sizes and sectors focused on what SMEs want from workplace wellbeing, and group income protection (GIP) as part of that.*
As a follow-up, I wanted to gain the intermediary perspective on the findings. And I’m extremely grateful to Laura for agreeing to be interviewed. Laura is a valued member of our independent Wellbeing Advisory Board and a huge advocate for wellbeing in the workplace. Here are some of the highlights from our interview.
Colin: To what extent does Barnett Waddingham work with UK SMEs? And what wellbeing trends are you seeing?
Laura: We work with all different sizes of organisation, including SMEs. We don’t really have a sweet spot, as such, and treat all clients the same, regardless of size.
We’re noticing a steady increase in organisations asking how they can make themselves an employer of choice. Recruitment isn’t discussed as much now as it was during the so-called great resignation in 2021. However, it’s clearly still a challenge. There are lots of overlaps between this, the Covid-19 pandemic and the shift to a more agile workforce for many. Personally, I don’t think all organisations filled their voids back in 2021. They just spread their work across their existing people. That might help explain the CIPD’s recent findings that employees are taking two whole days more sickness absence on average than before the pandemic, with stress a significant factor in both short- and long-term absence.
All of this has heavily impacted SMEs. They have the same duties and responsibilities as their larger counterparts but, with a smaller workforce, people tend to wear lots of hats.
SMEs want to do right by their people. They know they must support employee health and wellbeing, otherwise they’ll lose valuable staff. They also know that the onus is on them – from government and prospective employees – to do more. The government is looking towards them for help with disability support, just like it was with retirement support and auto-enrolment.
However, budget, time and resource are massive considerations for SMEs.
From a benefits perspective, SMEs are much more open to conversations about extending their benefits package. This comes with its own challenges such as time, resource and budget, but this is where consultancy support can definitely help.
For example, I was recently explaining the pros and cons of holiday buy and sell to an SME client. They really liked the buy aspect. But felt they didn’t have the funds for the sell option should there be an increase in employees selling a number of days’ holiday.
I explained, what if the sell option is about an employee being able to put the heating on this winter. Without this option, they might be left having to make cutbacks, one of which could be the work commute. Conversely, there are more productive hours in the workplace which will have greater impacts in increased revenue. There are indirect business impacts in benefits decision making and this is where we need to help employers understand.
Colin: The SMEs we interviewed said they want third party suppliers and consultants to be less product/transaction focused, and instead really get to know their business, people, ethos and goals. Are you finding this too?
Laura: Yes, we are. But that might be because we’ve got an actuarial heritage at Barnett Waddingham, so we’re really interested in data. This makes us less product focused from the start, as we identify the needs of both the employer and employee and make consultancy recommendations based on this. At BW, we are wholly independent, allowing us to focus on the best solution for the client.
For example, we recently did some consultancy for a large animal charity. Initial findings from a survey carried out by the organisation suggested their people would value health and wellbeing incentives and benefits. Specifically, earned wage access and a preferential loan facility. Had we only relied on that, it’s likely our recommendations wouldn’t have met the needs of the workforce.
Assuming you know what employees want never works.
That’s why we dig deeper as part of a strategic audit and review process with our clients. We followed up on the survey with employee focus groups. Also, interviews with the leadership team. We then brought all these findings together and ran a face-to-face strategy day with the client. In this, we looked at the fact that the survey said one thing, but the focus group findings said another. Once we’d had chance to explain what earned wage drawdown was, it turned out that employees would rather have access to financial education and signposting. Through good listening we could ensure that the client was investing in interventions and benefits that would make the biggest impact for employees.
SMEs really want to be well understood; their five year goals and sustainability and people strategies. Benefits and interventions need to support and enhance all that.
The SME market is vast and largely untapped from a group risk perspective. We’ve got to listen and get this right.
Colin: We also found that GIP is about much more than salary replacement for SMEs. It’s an important part of wellbeing strategy. And, as part of that strategy, has a role to play in an SMEs’ recruitment, retention and growth plans. What’s your view on this?
Laura: I agree GIP is much more than salary replacement. The challenge with SMEs, as I’ve mentioned, is that their people are wearing multiple hats. GIP is really great – it has multiple benefits, in addition to salary replacement, which can support both the employer and employees in many ways. But for multiple hat-wearing personnel, it can be seen as yet another provider, or another EAP service, or referral route to have to deal with. And if the consultant isn’t offering that ‘next level’ consultancy, then it will be viewed as the name suggests; a salary replacement benefit only.
Whereas what SMEs really need to hear about GIP – that ‘next level’ aspect – is: how to embed it in absence management and current processes; how to make a good referral and the timelines and process involved; the difference between rehabilitation and occupational health; and how to align the embedded wellbeing services with people, wellbeing and benefits strategies.
Intermediaries must work in partnership with their SME clients to help with all of this. My clients can lean on me like an extended part of their team, as we work in partnership them regardless of how big or small the organisation.
Colin: Finally, SMEs also told us they want help to achieve greater employee engagement with benefits – integrated and ongoing comms, with messages aligned with business and people needs and using channels best suited to audiences. To what extent does this tally with your client conversations?
Laura: It completely tallies. Importantly, all of this must be driven by management information (MI); what’s working and what’s not. That applies as much to the channels as it does to the messages. For example, Yammer used to be great – especially for dispersed workforces – but now we’re finding that it’s too vast and busy. Information just gets lost.
One thing I’ve seen that works really well in SMEs is the CEO getting closer to the workforce. We saw this during the various lockdowns – in all sizes of organisation – with the CEO doing regular, often live, all-of-company calls from their informality of their home. And people loved it. But this largely became lost when everything opened up again.
SMEs tend to have more of a family feel due to their size, so it would make perfect sense to revisit this approach. Perhaps a monthly call to all employees to update on anything new – strategic and tactical (including benefits) – and anything around charitable activity and volunteering.
*Legal & General Group Protection. Qualitative research programme. 20 x online in-depth interviews with employers across a range of SME sizes and sectors. January 2023.
