As the Covid pandemic recedes in the UK and the nation’s workers commence a gradual return to on-site working, we can expect a renewed focus on corporate health and wellbeing benefits.
That was the view of delegates at a recent Corporate Adviser round table examining the Great Return to Work.
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As workers emerge from their pandemic bunkers in the coming months, employers, advisers and providers will gradually understand the full impact of this remarkable period on the mental and physical health of their staff. Spiralling waiting lists mean treatment on the NHS will be harder to get, and an increased post-pandemic value placed on ‘people’ means we can expect a greater focus on health and wellbeing. Yet at the same time, many employers will be facing serious financial challenges and may be looking to trim their budgets.
Many insurance benefits and support services have been forced to adapt to a workforce that is largely working at home, so what changes will need to be made now this is changing again?
All delegates at the event agreed that the health challenges created by Covid and the enforced shift to home working had led to a renewed focus on employee wellbeing, and increased levels of paternalism from employers.
Barnett Waddingham senior wellbeing consultant Laura Matthews cautioned that this trend has not been universal, and argued there has been a varied response from employers. Some have provided very little support for staff beyond the government furlough scheme, while others have provided flexibility in terms of working hours, help with home working and a range of additional physical and mental health support.
“There are some organisations who did everything they possibly could to understand what was going on from a personal perspective in the employee’s life,” said Matthews. “This includes their physical and mental wellbeing, and the wider family and financial situation,
for example checking how parents were coping with childcare and home schooling arrangements.”
Employers doing more
This focus on wellbeing is likely to continue as many employers shift from remote to a combination of remote and on-site working.
Isio director Andrew Craig pointed out that this focus on wellbeing pre-dates the pandemic. “Many organisations have been taking employee wellbeing more seriously for a while. But the significant challenges created by Covid have certainly accelerated this process.”
He pointed out that there are paternalistic companies that focus on wellbeing because they have ‘strong values’, while other organisations who implement robust health and wellbeing policies do so because they see the business benefits of doing so.
Whatever the motivation, how does this more paternalistic attitude affect the range of benefits that corporates might offer their employees in future?
There was considerable debate as to whether companies might expand or contract the range of health and wellbeing benefits offered.
Cost pressures
Matthews argued that one of the ‘huge challenges’ facing the industry is the need for some employers to tighten their belts.
Companies may be recognising the importance of looking after employees’ wellbeing, but the lockdown has hit profit margins across many industries. And it isn’t just corporate profits that are under strain. Many individuals have seen their household finances stretched as a result
of reduced furlough pay and in some cases unemployment.
As Matthews pointed out, even those who have stayed in employment and have been able to work effectively from home may be less optimistic about pay-rises, bonus payment or promotions in the current economic climate.
This can have an impact on the type of benefits employers offer, or employees might select. For example, younger employees, who may be less likely to claim on a PMI policy, may be more inclined to decline this benefit, particularly as it is taxed as a benefit-in-kind via P11D.
“PMI might not necessarily be seen as such an attractive benefit by a younger generation. They might see themselves as fit and healthy and less likely to claim.”
This could have consequences for scheme pricing, she said, if it leaves an older cohort, who are more likely to claim. “This makes things difficult for the people who want to stay in the scheme, who could see prices rise. Organisations might have to calculate whether this a cost-worthy benefit, particularly if it is not being utilised by all employees.”
WPA managing director of corporate schemes Brian Goodman said that given the problem with growing NHS waiting lists, he didn’t envisage corporates or individuals ditching this benefit any time soon.
“From discussions we’ve had with private clients we’ve seen a big increase in enquiries. I think people are looking at the NHS and are worried that if they need treatment it could be a long wait.”
Valued benefit
Despite cost pressures, there is evidence that that PMI remains a highly valued benefit within the corporate sector, with some employers looking to add or extend cover.
Matthews points out that this comes at a time when there can already be upwards pressure of corporate health premiums. “From a consultancy perspective we’re already starting to have these conversations with insurers and clients.”
She says there was a significant reduction in claims last year with private hospitals cancelling many treatments, and handing over resources to the NHS to help with the pandemic.
“But we’re already seeing increases come in, with premium rises on even well-performing schemes.” She says this is due to a backlog of diagnostic tests and delays in treatment which is likely to lead to an increase in claims over the medium term.
Goodman said for corporates, PMI can be a cost-effective way to ensure employees get the treatment they need rapidly, and so can return to work more quickly. He adds that for a lot of people the benefit-in-kind tax looks like “pretty good value” for comprehensive healthcare cover.
There was widespread agreement though that there was a need for more flexible benefit packages, that can be tailored to an individual’s needs.
Flexible approach
Goodman said that he expects that tiered benefits options, offered by WPA, will start to be adopted by other providers.
“Should it just be a single rate for all employees, whether they are aged 25 or 60? This seems pretty inequitable. With this in mind we’ve introduced three tiered rates into our own healthcare scheme. We’ve also introduced a chronic benefit and ineligible benefit to cover this, which perhaps historically wouldn’t have been covered on a PMI policy, for example women’s health through pregnancy and childbirth.
“I think more organisations will be looking to cover this, as well as offering more mental health support.” This, he said, is likely to result in a more valued employee benefit.
Delegates also suggest that lower cost solutions —-such as cash plans — may become more prevalent.
Mercer client strategy leader Emma Bassett said the industry has transitioned from a ‘standard and restricted core benefit package’ that was commonplace 10 or 15 years ago. She added: “This was replaced by more flexible benefit packages about five years ago, with ‘wellbeing’ starting to become a buzzword.”
Things have evolved again, she says, and today employees don’t just assess benefits in terms of value for money. “They are looking at how these will improve certain aspects of their lives or their lifestyle. Benefits are content, education, support, and sharing knowledge that can help nutrition, physical health and mental wellbeing.”
Lifestyle impact
This broader approach will encompass a far wider range of benefits, from traditional ‘financial products’ and added-value support services.
HealthHero commercial director David Jennings said companies need to think more holistically as to what employees value as ‘benefits’.
“We’ve continued to see the evolution of what people need and expect from a corporate benefits package. We are not yet fully out of the pandemic yet, but I would expect in a post-lockdown world, there will be a sizeable shift in the way people consider corporate benefits.”
Bassett agreed that the way organisations and individuals view employees benefits is changing. “Reward and recognition are key,” she said. This is obviously reflected in pay and promotion packages as well as traditional employee benefits – be it pensions or healthcare, which have a clear financial value.
But she added that there are other ‘softer’ benefits which have come to the fore in the pandemic, many of which can improve an individual’s wellbeing. This could be flexibility around working hours, effective feedback and support for employees, or simply proper recognition — simply saying thank you for example — for work done under often difficult circumstances.
Jennings termed this the ‘Google-effect’. He said for employees a combination of the benefit package and the corporate culture can help with both recruitment and retention — a key aim of any employee benefit policy. Jennings added that given high rates of unemployment, there may be higher levels of job satisfaction at present from those grateful to still be in work.
Employee benefit packages will need to be more flexible in future to cater to the varying needs of different employees. But they also need to be robust enough to deal with the specific issues created by the Covid pandemic.
Mental health crisis
Basset said one of the biggest health and wellbeing issues to emerge in the wake of Covid is the mental health crisis. She says many mental health issues have been exacerbated by a range of Covid-related issue, from financial worries, to losing a loved one or anxiety about an individual’s own health and wellbeing.
She pointed out that anxiety is also a key symptom of Long Covid. “There are a lot of people who have said previously that they are not an anxious person but this has changed with the long-term effects of Covid.”
In terms of wellbeing she said companies need to look at how they manage this, and how the effects will vary across a group of employees. Some may be keen to return to the office, others less so.
She said: “Data is important here, to try and identify where people are having problems and put in place measures to support them. It goes back to how employees are feeling. This may be seen as ‘fluffy’ stuff but it is a really fundamental part of any comprehensive wellbeing package.”
Many health and group risk benefits are starting to address Long Covid, putting in place pathways for employees to seek specialist help with the range of potential symptoms. Again this can ensure more timely intervention, reducing the likelihood of long-term absenteeism.
Craig agreed that there is likely to be significantly higher demand for benefits that offer additional mental health support. “There may be benefits that have offered this previously, but I think people will now have more of an appreciation of the value of these services.
“I think there’s also the opportunity to review current benefit packages, look at what is available, and whether it works, and whether there is the opportunity to refine it in any way.”
Jennings pointed out that there is still the issue of stigma around mental health problems and this should be a priority for managers in the workplace to ensure this issue is effectively addressed.
Post-Covid productivity
He added: “The Covid pandemic may mean we look at issues of productivity and presenteeism through a different lens. Productivity is a difficult one: the lockdown has meant many employees are a lot more productive – for example they are not having to commute, or travel to a different town for a client meeting.
“In terms of outcomes a 45-minute call may be more productive than a train trip to London for a meeting. But if you ask an employee how they feel about ‘productive’ back-to-back zoom meetings they may not feel great about it at all, and in fact this may be counter-productive. We need to be aware of that.
“Similarly, there is a lot of talk about presenteeism. But there needs to be a conversation with employees. Do they feel engaged and present, or part of the conversation again with their employers when they are working remotely?”
If companies are looking to put wellbeing at the heart of their employee benefit packages post lockdown he says it is important to consider these issues.
However the panel agreed that it may still be some time before employers, consultants and insurers fully understand what this ‘new normal’ will entail.
2021 will continue to be a period of change: for insurers, consultants and employers as they try to understand the impact the pandemic has had on working patterns and lifestyle, and how this affects both organisations and individuals.
It is important that employee benefits continue to be flexible and adaptable to support both employees and employer’s corporate purpose.