Press release 9 July 2019.
More than one third of businesses (36 per cent) choose to fund ongoing employee benefit commitments such as private healthcare and group risk protection as a way to motivate, reward and engage staff.* Large corporates particularly favour this method, with 64% funding ongoing employee benefits; the number reduces for SMEs at 29 per cent, of which only 12% of micro SMEs (those with 1-9 employees) are happy to do so.
Funding one-off events or payments to motivate and reward staff also remains popular, with little difference in propensity between large corporates and SMEs. Overall, 44 per cent invest in training, appraisals and continuous professional development; and just over a third arrange ad-hoc events such as parties/celebrations (36 per cent), or ad-hoc bonus payments, vouchers and other one-off rewards (35 per cent).
According to GRiD, the industry body for the group risk protection sector, the main reasons employers choose to fund long-term benefits are threefold:
- Staff appreciation
- Appreciation of wider value for the business
Perception of staff appreciation
Rewarding and motivating staff through ways such as celebrations and training are very visible, can give immediate gratification, and will be appreciated by certain sections of the workforce. However, many employers realise that longer-term benefits, can have an even wider appeal and longer lasting effect.
As ever, it comes down to communication. It’s particularly important to show how different benefits can address specific needs that staff may have according to their age, life-stage and lifestyle. For example, group risk benefits often provide access to an employee assistance programme as standard that can provide advice the whole workforce can benefit from, such as on moving house, probate, flooding, parking tickets and disputes with neighbours.
Katharine Moxham, spokesperson for GRiD said: “Both one-off and ongoing benefits and rewards have their place, and if employers want to engage their whole demographic, it’s important that they offer their staff a mix. A party is great while it lasts, but can soon be forgotten. Health and wellbeing and financial protection benefits are designed to provide ongoing value, and may be appreciated by a wider demographic. This is as true for larger corporates as it is for SMEs. We’re pleased that so many staff within SMEs are benefiting, but we can see there’s an opportunity for more to.”
Longer-term benefits have become increasingly affordable, and aren’t as expensive as some HRs may expect. Of those that reward staff with one-offs, the average spend is £947.90. Yet longer-term benefits don’t have to cost as much as that. For example, the average cost of providing group income protection is £310** per employee, per year and can be a lot less than that.
Katharine Moxham continued: “Health and wellbeing benefits, including group risk financial protection (employer-sponsored life assurance, income protection and critical illness benefits) are continually being enhanced, and providers work with advisers to find ways to make them more affordable. For instance, with group income protection, although historically benefits would have been bought to support employees on claim through to retirement age, it is quite reasonable now to offer benefits to staff that are payable for a fixed term such as two, three or five years. This is still a great benefit for staff, but is even more affordable for employers, and better reflects the current pattern of employment.”
Companies that look at what’s available can often find options that enable them to fund long-term benefits. Those that don’t may mistakenly disregard these benefits out-of-hand on perceived cost. Specialist advisers will tailor packages to suit the size of organisation, demographic, and budget.
Appreciation of wider value for the business
Group risk benefits can include support for in-house HR teams such as absence and case management, employment law advice and mediation. This can mean such support doesn’t need to be financed separately. So, as well as adding genuine value to a business, these benefits can also actually represent a saving in real terms.
Some businesses may not want to commit to long-term expense if they are uncertain about sustainability of future budgets, but it’s important to consider all the facets of the longer-term benefits, and understand the detail of what they can provide to ensure value for the business.
Katharine Moxham concluded: “We’re very pleased to see employers appreciating the value of long-term employee benefits to both their business and their staff. We hope that others follow suit, particularly smaller companies. We completely understand the reluctance to invest in long-term benefits, but suspect that a lot of that reluctance may be based on misconceptions. Such benefits are valued by staff, they aren’t expensive, and they can even save businesses money by providing access to services that companies may already be paying for.
“We would urge businesses that aren’t already doing so to look at what’s available. We think they’d be pleasantly surprised.”
- Ends –
*Research undertaken by Opinium on behalf of GRiD amongst 500 HR Decision makers between 4-18 March 2019. SME definition includes business with 1 – 249 members of staff.
**Swiss Re Group Watch 2019
For further information please contact:
SMUK Marketing and PR
Mob: 07747 611773
Land: 01252 843350
Spokesperson for GRiD
Mob: 07887 512508
Notes for editors
Group Risk Development (GRiD) is the industry body for the group risk protection sector, promoting the value to UK businesses of providing financial protection for their staff, enhancing their wellbeing and improving employee engagement. Our membership includes insurers, reinsurers and intermediaries who have a collective wealth of experience built over years of operating in the group risk protection market. Under the chairmanship of Steve Bridger (MD Group Protection, Corporate, Aviva UK Insurance) GRiD aims to promote group risk through a collective voice to Government, policymakers, stakeholders and employers.
GRiD works with government departments and regulators involved in legislation and regulation affecting group risk benefits, and with other organisations involved in the benefits and financial protection arenas. GRiD also seeks to enhance the industry's standing by encouraging best practice and by participating in industry-wide initiatives such as the professional qualification in group risk managed jointly with the Chartered Insurance Institute.
GRiD’s media activity aims to generate a wider awareness and understanding of group risk products and their benefits for employers and employees.
GRiD's dedicated spokesperson, Katharine Moxham, provides expert media comment on a full range of group risk issues.
Follow Katharine Moxham on Twitter @KMoxham