While the UK’s productivity gap is a mammoth problem, the range of tools the group risk industry brings to employers to help tackle it is wide and varied. The tools that insurers and their partners bring to the table are already generally fit for purpose, agreed delegates at the Corporate Adviser Tackling The UK’s Productivity Deficit: The Case For Group Risk round table in Bath last month – the bigger challenge is ensuring employers and employers are aware of them.
Intermediaries at the event made it clear that while the case for greater utilisation of productivity tools contained within group risk products is strong, employees are a long way from perceiving the group risk sector in general as the place they go to to deal with their human capital management issues.
Hargreaves Lansdown lead workplace benefits consultant Stephen Briggs said: “The conversation isn’t presented as a concern affecting productivity and there isn’t necessarily a direct link between this and group risk, but there may be an inherent awareness. Traditionally, employers have been working brilliantly on the physical areas of how they can help their employees, but the financial and mental sides have been very slow to catch up.”
Aspira Corporate Solutions corporate benefits executive Daniel Lamb agreed there was a way to go before employers would be in a position to engage in high-level productivity conversations. He said: “When talking to HR directors, finance directors or both it’s really about understanding what’s important to them. You can bang on all day but they feel you are selling to them and don’t like it. I spend most of my time listening and understanding what they are trying to achieve, and then I offer solutions in the last few minutes.”
That said, Canada Life Group Insurance marketing director Paul Avis was confident that the added-value services available nowadays are fit for purpose. The challenge for advisers, he said, is understanding and articulating the many problems employers face and then demonstrating how the tools that already exist can be used to help solve these problems.
He said: “So we’ve got all this stuff available to people and we want it used and engaged with because it can address many of the productivity challenges, like debt, eldercare, childcare and not getting enough sleep. So from a technology perspective that answers a lot of these questions. The things that matter to both employer and employee are the support services we are providing because they transform lives, they can be used daily – the list goes on.
“So if I said we have the best quality support services to engage your employees, assist with the productivity challenge and with the presenteeism issue, provide early intervention and assist with your health and wellbeing strategy, then suddenly you’re having a different conversation from ‘here’s insurance with a few add-ons’.”
i2 Healthcare director Simon Derby spelled out the commercial reality for advisers, pointing out that: “We can all do the engagement stuff but I would go broke if all I sold was employee assistance programmes (EAPs).”
Derby added that current levels of turnover in the workplace meant that not all employers were quite so bothered about their employees’ wellbeing.
“In most organisations employers and employees tend to be looking at a relatively short work-cycle,” continued Derby. “Many employees change jobs every five years, so the employer doesn’t feel so paternal towards them. There is also a big argument that employees should get their own house in order.”
But Canada Life HR business partner Emma Fletcher posed a contrary view, describing an incidence of extreme paternalism she had encountered where an employer didn’t want to move their group income protection scheme while an employee was receiving cancer treatment and being supported by the provider.
Briggs said the reality is there are clients at both ends of the spectrum. One will tell him their employees are adults and it’s all their responsibility, while another will “literally work until midnight or 2 am because they are worried about their staff.”
Even where there are paternalistic organisations that have available and receptive decision-makers, there is a further obstacle to overcome in getting the messages passed down to the lower tiers of management.
Derby said: “The values of group income protection often don’t get filtered down past the people you are seeing at that particular meeting. Line managers need to be trained and managed and ‘told’ what to do. They must be informed what tools are available in the toolbox and how to point employees in the right direction.”
One particularly fierce area of debate concerned whether add-ons that can tackle presenteeism should be presented as ‘free’ or not. Derby pointed out that i2 Healthcare had a section in its report about ‘freebies’ – like EAPs and second opinion services such as Best Doctors – using the term deliberately because people like something for free.
But LifeWorks consultant Luke Prankard argued: “If we focus on this as a nice-to-have piece in the product they are buying, it not only belittles it but we are not showing how it intrinsically links to the proposition and the problem we are trying to solve for them.”
Lamb also pointed out that: “Even if you say its ‘free’, clients will know it isn’t but is built into the cost of what they are buying. You are dealing with very intelligent senior people.”
Avis said the ‘free versus valued’ debate goes on across all corners of the industry all the time. But he didn’t leave anyone in much doubt as to which side he was on.
“The word ‘free’ grabs peoples’ attention but when they hear it they often assume they are not getting quality. The financial benefit is fantastic when it happens, but you have to ask whether it’s all the things you can use on a day-to-day basis that engages. And so, for me, positioning it as much more than a financial benefit is the road of travel. We are services as well as financial services providers.”
Lamb said: “It very much depends on whether the client already has insurance or not. If it already has group risk you can mention all these things and it doesn’t matter whether you say it’s free or not. But with a brand-new client it’s a totally different conversation. You listen for 55 minutes and then in the last five minutes mention that you have a solution for their requirements that does all these things.”
Delegates considered the extent to which pension contributions – set to increase in April for auto-enrolment – were eating up the benefits pot. Avis produced some persuasive figures to support his case that although pensions were compulsory, offering group risk should be just as high a priority.
He said: “Advisers have a huge amount of data, particularly for pensions and group life, so why aren’t they all proactively quoting a two-year term half-salary scheme which comes with an EAP, second medical opinion, treatment sourcing, online legal service and vocational rehabilitation. The total cost of such a scheme can be 0.08 per cent of salary, which is a hundredth of the cost of an auto-enrolment pension contribution for this year.
Briggs said: “A lot of the messages around pensions are around saving but the challenge is to link products to wider issues with targeted messages. Finance isn’t just about saving – it’s also about what happens if you have an illness and you or your spouse may have to give up work. So it’s about linking these other supporting financial products to the wider financial strategy.”
But, as Lamb pointed out, messages about pension saving have been the subject of massive communications efforts, and the group risk industry needs to do something similar.
He said: “With pensions most people are now saying they need to put more in, so you need to create the need in the same way so that people start saying they need group risk.”
There was general agreement that the group risk industry had not managed to communicate to the wider public the paucity of state benefits, and that doing so was key to unlocking the door to interesting both employers and consumers. Advisers suggested it was for providers to step up to the plate and start making the case.
Derby said: “We need to start talking about what people get if they go ill for more than 28 weeks and their Statutory Sick Pay stops. It can only come from the product providers. They need to do something to help us intermediaries grow our business.” Prankard pointed out that Unum had already unsuccessfully tried an awareness campaign but Lamb insisted that its message had been unclear. With no insurer willing to try a more effective campaign, there was some agreement that the Association of British Insurers (ABI) and Group Risk Development (Grid) should come together and form a combined promotional thrust.
The communications effort also needs to raise awareness of the support the group risk industry can offer in little publicised areas like family support and eldercare.
Avis said: “5 per cent of our RedArc usage is for parents and children and 8 per cent of our Best Doctors usage is for under 18s. If I know the RedArc nurse is going to do a family call at 6pm and facilitate discussion about how the family are feeling about the eight-year-old who has cancer, then that’s going to mean at least I have a chance of focusing on my work.”
LifeWorks consultant David Shearman said: “If someone is at work thinking the kids have got six weeks off school coming up, what am I going to do with them and will it cost me the world, they can contact us and we can do all that research and find out what’s going on in their area. It means they can just get back to focusing on their work.
“With eldercare, the support services around helping people with concerns are also vital, although there is still arguably the bigger problem that people can’t afford the costs of long-term care, which can be astronomical.”
Lamb even suggested getting rid of the name ‘income protection’. He said: “It is a name that no-one understands or likes.” He suggested replacing it with ‘family insurance.’ But Derby replied: “It doesn’t matter a fig what we call it unless we promote it.”
There was universal agreement that an industrywide educational programme could not start soon enough. Many of the problems that need to be tackled are only going to get worse, at a time when HR departments, already under extreme pressure, are constantly being asked to do more for less.
WHAT KEEPS EMPLOYEES AWAKE AT NIGHT
Data from the 50,000 calls a year to the LifeWorks EAP service centre
Emotional Issues impacting productivity:
1. Mixed Anxiety & Depression Issues – 55% of all emotional calls
2. Personal Relationship Problems – 20% of all emotional calls
3. Bereavement Issues – 10% of all emotional calls
4. Traumatic Experiences – 5% of all emotional calls
5. Addiction & Dependency issues – 5% of all emotional calls
Practical Issues impacting productivity:
1. Legal issues and concerns – 25% of all practical calls
2. Work Performance issues – 20% of all practical calls
3. Financial & Debt worries – 15% of all practical calls
4. Childcare issues – 12% of all practical calls
5. Eldercare issues – 10% of all practical calls
