What is a company’s most important asset?

What is it that makes your business, or that of your clients tick? What gives you a competitive advantage in the market?  What asset is the one thing you couldn’t do without?  In a recent survey we commissioned, an overwhelming majority – 96%[1] of those asked – said that employees were the most important for them.  In our industry, the right products and equipment are important, but what really brings our proposition to life is the people behind these.  So you’d think staff would come top of the list when it comes to protection, but this is rarely the case.

There is huge mismatch between what companies spend on protecting easily replaceable assets, such as printers or mobile phones, versus their most valuable asset: their people.  Companies are spending money protecting replaceable assets, even though many are not worried about them breaking.  Of those surveyed, 46 % of firms have insurance for printers but less than a fifth of these firms would be very or extremely concerned if their printers were to fail.  One objection we often hear to Income Protection is that employers don’t expect their staff to go off on long term sick leave.  However if businesses are prepared to pay out on insurances for items they are not worried about replacing, they should be concerned about protected employees who are their most valuable asset.  Now could be a good time to get your clients to take a step back and review their insurances.  Are they spending money wisely to protect the future of their business?  Are they protecting the things that really matter?

While your clients will recognise that their employees are important, few seem to be making the connection between looking after their staff and having an effective employee benefits package in place.  About a third of companies surveyed admitted that they only offer adequate staff benefits, and could do more to protect their employees.  This could be for a variety of reasons, for example constrained budgets or lack of knowledge.  However, if these companies knew the potential returns an effective and well-communicated benefits package could provide, they may be more inclined to consider their employee benefits in a more strategic way.   For example, improving an employee benefits package can drive productivity gains by boosting morale and engagement.

Sickness absence is still a major concern in the UK.  According to recent figures from Price Waterhouse Coopers it cost the UK economy a staggering £29 billion a year.  This figure covers all sickness absences.  When you look at just long term absence, the amounts involved are still significant. To put that in to some kind of context, for a typical business with over 500 employees long term sickness absence will cost them £620,000 a year[2].  In our survey 90% of businesses admit that long term sickness absence is a concern for them. However, less than 1 in 5 (17%) companies protect against long term sickness by offering Income Protection as part of their employee benefits package.  Around 1 in 10 employees will go on long term sick leave during their working lives, so it is concerning to see so many employers without a back-up plan to protect them.

In the current economic climate, with salaries under pressure, employee benefits are becoming an important differentiator when it comes to recruiting and retaining staff. A key component of a modern, relevant employee benefits package should be insurance to protect staff against the financial impacts of sickness absence. We want to work with you to help your clients recognise this, so that more of them protect their most important asset: their people.