An organisation’s employee benefits package can say a lot about its approach to diversity, equity and inclusion (DEI). Advisers have an important role to play in supporting a benefits revamp that delivers on the DEI front.
Most employers are aware of the reasons why DEI is a must, with benefits ranging from greater productivity and innovation to improvements in customer and employee loyalty. “It’s the right thing to do, but there are also genuine advantages to having happy, included employees,” says Nick McMenemy, digital, strategy & markets leader at Mercer Marsh Benefits.
Too hard to do
But, when it comes to delivering on this front, the scale and potential cost of the task can be a deterrent. Emma Capper, UK wellbeing leader at Howden Employee Benefits & Wellbeing, says that while she’s seen a lot of employers making their benefits more equitable, shifting away from hierarchical benefits such as medical insurance for senior executives only, many stop there. “Organisations need to consider the diversity and inclusions aspects too,” she adds. “This can be addressed through benefit choice: everyone is different and will value their own personal set of benefits.”
The drive for choice can be seen in the latest wave of health and wellbeing benefits to hit the workplace. While medical and dental were key five years ago, employers are now offering support in areas including fertility and parenthood, neurodiversity, menopause, and elder, child and pet care.
Offering this choice can sound like a major investment but Ed Watling, head of health and wellbeing benefits at Mattioli Woods, says most organisations already have many of the elements of a diverse health and wellbeing proposition. “Many products, especially in group risk, include added-value benefits. An extra like a wellbeing app can cover a range of different employee needs.”
The addition of added-value benefits means a company can find itself with a handful of employee assistance programmes and virtual GP services. “Audit what’s available and look at factors such as whether all employees are covered, if dependants are included, and the type of counselling available to determine which is the best and promote that,” says Capper. “This will make it more effective and give access to better quality management information.”
Listen and learn
As well as looking at what’s available, a good DEI strategy must include employee feedback. Capper says she’s seen employers spend a fortune building what they thought was a DEI benefits package, only to find it didn’t meet the needs of employees. “Employee voice and listening is really important,” she says.
There are several ways to get this employee input. As well as surveys, employers can use data on employee demographics and the results of health risk assessments to shape their understanding of the workforce’s needs.
Feedback from focus groups and employee resource networks can also be invaluable. McMenemy recommends surveying employees to find out how they identify to highlight the different groups across the workforce and the benefits they might need. “It’s important to be mindful of intersectionality, where an employee is a member of several different groups, for example a single male parent or a black LGBTQ female. Everyone has their own benefit requirements,” he explains.
Watling also recommends being open with employees. “An employer should explain to employees that it’s adopting a DEI approach across its benefits and encourage them to flag any gaps or areas where they feel they’re not included. This openness also feeds into a more inclusive workplace,” he explains.
Build the benefits
Armed with insight from employees and a clear understanding of what’s already available, an employer’s benefits package can be designed to fit its DEI objectives. McMenemy recommends assessing the providers in this process. “Think about their ESG criteria. What are the values of the health insurer? What pension investments are available? We’re developing a framework based on these criteria to inform selection,” he explains.
There are several ways to support greater benefits personalisation. A flex platform is the obvious option, although most require a minimum of 100 employees.
Health and wellbeing pots, where every employee receives a set amount to spend in any way they like, are becoming more popular but Debra Clark, head of wellbeing at Towergate Health & Protection, is cautious. “These can require a lot of administration,” she says. “An employer would need to manage receipts but also all the P11d liabilities. It’s much easier to offer this flexibility through a cash plan or by having pathways to self-pay treatment.”
Where budgets are tight, she prefers using voluntary benefits to help employees get the health and wellbeing support they want. “The employer can provide a base level and allow employees to top up. They get what they want at a preferential rate and the reassurance that it’s a trusted provider. We’re also seeing lots of on-demand services from the insurers, such as discounts for physiotherapy networks, treatment and menopause plans.”
Communication is king
Regardless of what’s in the benefits package, the way it’s communicated to employees will determine how successful it is from a DEI perspective. “It’s often where organisations go wrong,” says McMenemy. “They’ll spend a significant amount on reward but very little on communications. They’re not sweating the benefits: it’s frustrating.”
To be effective, employers need to communicate often, and strategically. “Bring the benefits to life,” says Clark. “By packaging them for different employee needs, for instance starting a family, divorce, retirement, an employer will get more value from their benefits.”
It’s also important to maximise communications: employee needs change and they won’t necessarily know what benefits are available if they’re only told about them once a year. McMenemy recommends using data to identify potential changes in need. “HR professionals are often surprised by the amount of data they have. This can give better insights into the workforce and enable data-driven decisions.”
Line managers also have a key role to play. By ensuring they understand the range of benefits available, they can recommend the most relevant support to employees.
When done well, Clark says this focus on DEI can make the return on investment go through the roof. “Where an employer raises awareness of all the benefits that are available, employees will value the benefits and the organisation more,” she explains. “Making people feel valued builds the right culture and helps to attract and retain employees.”
BOX: Common mistakes
▪ Failing to get board buy-in for DEI
“An enterprise-wide, strategic approach is essential. It has to be adopted at a C-suite level: leaving it to HR will not deliver all the benefits of DEI.” Nick McMenemy, Mercer Marsh Benefits
▪ Following DEI buzzwords
“Speak to employees to understand their needs and what motivates them. There’s plenty of buzz around DEI but organisations should use their data to determine what’s right for them.” Debra Clark, Towergate Health & Protection
▪ Making support too narrow
“It’s common for employers to offer fertility and family forming support to female employees but they should consider supporting their partners too. They can get really lost in these situations.” Emma Capper, Howden Employee Benefits & Wellbeing
▪ Leaving decisions to the minority
“Putting a white male aged 50 plus in charge of benefits decisions is never going to deliver benefits that meet DEI objectives. Reach out to employees to find out what they want.” Ed Watling, Mattioli Woods
▪ Offering one-size-fits-all communications
“Organisations need to develop different communications to reach as many employees as possible. These must use inclusive language but also be offered in a variety of formats as people absorb information differently.” Emma Capper, Howden Employee Benefits & Wellbeing
