What will influence future employee benefits design?
Recent research[i] revealed the effect of the Covid-19 crisis on UK SME business performance is immense, with 80% experiencing a decline in revenue. Almost a quarter (24%), are concerned about their ability to retain employees and 28% expect to reduce headcount. Matthew Gregson, Head of Corporate at Howden Employee Benefits & Wellbeing, says the pandemic will also prompt employers to review and adapt their employee benefits packages, with some key trends emerging.
Research from the Chartered Institute for Personnel and Development highlighted that employers expect the number of people working from home regularly post Covid will increase to 37%, compared to 18% beforehand. While YouGov[ii] research found that 57% of British workers want to be able to continue to work from home compared to 39% who say they do not want to work from home.
Matthew says, “Homeworking looks set to stay. The Government’s recent U-turn to ask people to return to homeworking wherever possible, means this way of working will be with us for the foreseeable future. Many employers, including some who were reluctant to promote homeworking before the lockdown, have seen the benefits for both their business and their people’’.
A forecast by Global Workplace Analytics[iii] estimates that 25-30% of the global workforce will be working from home multiple days a week by the end of 2021.
Matthew says, “With a rise in home working, employers will need to review and adapt their benefits packages to ensure they are fit for purpose. Whilst the mainstay of benefits packages, such as pensions, healthcare and financial protection will remain, the wider offer will need to be adapted to recognise the changing dynamic home working brings.
“Support to travel (commuting) arrangements will likely need to be modified, whilst flexible working practices and provision of tools to do the job effectively from home increase. It comes down each employer’s assessment of, and response to the needs of their employees.”
There is also the issue of health and safety. Health and wellbeing, especially mental health has moved up the corporate agenda. PwC’s latest CEO survey[iv] found that since Covid-19 93% of UK CEOs (92% globally) have prioritised protecting employee health and safety over everything else, with 90% of UK CEOs providing mental wellbeing support and initiatives.
Matthew says, “The pandemic has focused attention on health and wellbeing, and we are seeing rising demand for healthcare cover. With long NHS waiting lists for diagnosis and treatment, services such as private medical insurance, cash plans, EAPs and virtual GPs are likely to be a core part of benefit packages in the future.
“Whereas, in the past approaches to health, especially medical insurance, can create the “haves” and “have nots”, it is clear that the market is already adapting with solutions to meet differing employee needs and employer budgets, together with a greater focus on digital/virtual services.
“The unprecedented impact of Covid-19 on our needs and how we work has already impacted employer thinking around benefits engagement – helping employees get value from the benefits and associated services on offer. Whilst for many, flexible benefits will continue to work as a pillar of their strategy, the focus on day-to-day support for employees, from fitness and wellbeing, to managing budgets and taking advantage of discounts and savings, will take centre stage for the foreseeable future.”
For companies operating internationally, another key trend that has emerged during the crisis is the move towards global benefits becoming more centralised and consistent, but with local adjustments, depending on the country.
Howden Employee Benefits & Wellbeing is increasingly seeing companies wanting to manage employee benefits centrally and widen employee access to healthcare benefits including global virtual GPs, medical insurance and global EAPs.
Adam Harding, Director of International Healthcare at Howden Employee Benefits & Wellbeing says, “There is a growing need for consistency across the entire workforce and for firms to look at how they make country-level policies global. There are benefits and insurances that could be centralised and more companies are moving towards this.
“We anticipate benefits will become more employee-led too. Workers will want to select the benefits that suit them, and employers will need a multilevel benefit system where employees can pick and choose. As the whole of the world changes, so it makes sense that the benefits employees will want will change too.
“Businesses will need to invest their benefits budget wisely and in areas where the impact will be most keenly felt. For example, the recruitment market will be extremely competitive in the future. Having the right benefits will help companies attract and retain the best people, and ensure their workforce is looked after.
Adam concludes, “We recommend companies seek advice, as benefits and benefits packages are likely to become far more complex and unique, and therefore potentially more costly. This is especially important for those who want to introduce a global benefit platform and have a multinational workforce, where home working could be from anywhere.
“A broker can negotiate the best deals and provide advice on local regulations, taxes and culture. They can simplify the process and ensure a benefits strategy meets the changing needs of the workforce in the post Covid-19 world.”
For more information, please visit www.howdengroup.co.uk