Four out of 10 companies are changing their employee benefits programmes in response to the Covid-19 pandemic and the effect it has had on working patterns.
The study, by Willis Towers Watson, found 42 per cent of companies have made, or are planning to make changes, while a third of employers are also likely to revise healthcare strategies for 2021.
This survey of UK employers found many firms are anticipating significant cost increases in the benefits they provide for employees. Almost half (44 per cent) are expecting sick leave costs to increase, while over a third (34 per cent) think that group life and dependent pension costs will also rise.
A quarter (25 per cent) are expecting an increase in healthcare costs and group income protection and (37 per cent) are planning to review the way their medical benefit plans are designed.
For those employers who have had to furlough some staff, almost all — between 87-98 per cent depending on the individual benefit — are maintaining existing benefits for furloughed employees.
Willis Towers Watson managing director of UK Health & Benefits Kevin Newman says: “Covid-19 will prompt big changes in employee benefit programmes for many companies.
“Some will be forced to get better value from their benefits, both from a cost and communications perspective. Some will look to enhance certain areas and dial-down others as priorities shift. But most companies at some point are likely to look at what they currently provide employees and ask whether these benefits are still relevant and if the balance still right for the new working environment?”
Willis Towers Waston says there are key areas companies are focusing on to make sure their benefits programmes are fit for purpose during and after the pandemic.
Encouragingly for employees, more companies are looking to enhance certain benefits rather than reduce them. Top priorities for enhancing benefits include: wellbeing programmes (60 per cent); mental health and stress management services (58 per cent); annual leave policies (26 per cent); and voluntary benefits (23 per cent).
Benefits most likely to be reduced include: annual leave (8 per cent); retirement benefits (5 per cent); healthcare benefits (4 per cent); and sick leave (4 per cent).
In addition, over a quarter (28 per cent) of employers have taken action to measure employee anxiety during the current period, with a further 47 per cent planning or considering this action.
Furthermore, two-in-five (39 per cent) employers have provided, or expanded, access to telemedicine and a small proportion (7 per cent) will be facilitating access to Covid-19 testing.
Almost two-thirds of employer surveyed (61 per cent) think that communication of benefits and wellbeing programmes will be a top priority this year.
Top of the list for awareness raising are Employee Assistance Programmes (79 per cent); online mental health services (65 per cent); and wellbeing apps (47 per cent).
Newman adds: “Re-shaping and re-planning benefits will be important, but most elements of a company’s employee benefit programme will continue to serve their employees well if the relevance is communicated effectively.
“In times of stress and uncertainty, Employee Assistance Programmes and mental health services become even more important and employees that haven’t used these services in the past may need reminding that companies often have a network of valuable support services available to employees.”