The Covid-19 pandemic is challenging employers’ ability to manage their staff, but products, providers and advisers are there to help them through the worst, say experts.
Cavendish Ware associate director Roy McLoughlin says consultants and advisers have a vital role to play in the months ahead, supporting clients at what may be a critical point for their businesses.
He says: “It is important advisers don’t disappear. They need to be there to take calls. There may not always be solutions, but they can be there to answer questions and talk through options.”
Initially, questions are likely to be around the cover available on group risk policies and issues surrounding pensions. Some firms are already asking whether it will be possible to take a pensions holiday to ease financial pressures on the firm.
“At the moment firms have a legal obligation to make minimum payments,” McLoughlin says. It is possible some may be considering reducing higher payments to this minimum. Advisers can discuss the short-term and long-term consequences of this. If payments cease this means employees could miss out on any subsequent upturn in stock market valuations as we move out of this crisis.
Premier Companies head of employer services Sue Pemberton says consultants have a vital role to play highlighting and explaining the benefits and services clients may already have.
“It can be as simple as sending through communications details what services are available under an employee assistance programme. Staff may not always realise they have access to helplines for stress and mental health, virtual GP services or early intervention programmes. These may be really invaluable services in the months ahead.
“Consultants needs to make employers aware of all the benefits on these policies and ensure this information is shared with employees.”
As she points out this engagement and communication can be done remotely while many staff are working from home.
Consultants have also pointed out that there will be an important role to play when it comes to education and communication surrounding pensions, many of which will has seen sharp values in value following the collapse in stock markets around the globe.
Howden Employee Benefits and Wellbeing’s head of benefits strategy Steve Herbert says: “As an industry we may need to rethink and reposition how we communicate and engagement clients with pensions.
“This may need to be a lot more education to ensure members don’t stop making contributions to AE schemes.”
Herbert says that over the longer-term there would also be an opportunity for the industry to rethink how it approaches issues such as financial wellbeing. “This crisis will certainly show that many individual employees don’t have much in the way of financial resilience. Employers who come out of this on the other side may be looking at ways that they can help support employees in future, with more of an emphasis on saving and financial wellbeing.”
There may in future he says be more of an emphasis on income protection as being a key group risk product. Herbert says: “This is an important benefit, but sales have not really grown at all for years. This may change going forward as people realise how little they have to fall back on and what little support there is from the state.”
Consultants will also play a vital role in helping to renegotiate scheme terms, particularly for those businesses whose revenues have been hard hit and are looking to reduce expenditure.
McLoughlin says: “I would like to see some flexibility from providers on these issues, for example rather than cancelling schemes allowing them to scale down benefits where appropriate.
“There is some precedence for this. For example after the 2008 financial crisis individual were able to reduce the love of life cover, rather than cancel it completely. It would be good to see something similar in the group market.”
The crisis is also likely to highlight the importance of firms have robust technology solutions, that enable them to communicate with clients remotely.
Many in the industry – include Canada Life’s Paul Avis – agree that one outcome will be many more people working from home and using remote technologies like video conferencing on a permanent basis.
“This may help improve productivity issues,” he says. “People will be spending less time commuting or going to face-to-face meetings.”
Benefiz founder and director Tim Gillingham: “Interestingly before the outbreak of the virus we ran a remote beauty parade for a client who was looking for a new PMI provider.
“Out of the three shortlisted providers only one was able to dial into our clients conference call facilities. The other two providers were not allowed to access a third party site and share their screen due to compliance reasons.
“Maybe one positive outcome of this could be that providers embrace the new world and develop a more sustainable approach to securing new business.”