Two-fifths of HR bosses are unaware of the amount their firm spends on employee benefits, according to research from Willis Towers Watson.
The firm’s 2017 Employee Benefits survey found rising cost is the biggest barrier UK businesses face when delivering employee benefits programmes, with 50 per cent of HR decision-makers seeing it as a key challenge over the next three years.
Meanwhile, 35 per cent are concerned they will not have the budget to make benefits changes.
Despite this, 40 per cent of HR bosses claimed they did not know the amount they currently spent on benefits.
The study found 67 per cent of companies plan to review benefits strategy and programme design over the next three years to better manage costs, while 69 per cent intend to do so in order to better influence employee behaviour.
One of the barriers to SME take-up, according to the report, was “perceptions of cost and benefit”, alongside “complexity”.
The government hopes to boost group income protection as a means of encouraging more disabled people into work, having made a manifesto commitment to ensure one million more disabled people are employed over the next 10 years.
Mark Ramsook, head of sales and marketing at Willis Towers Watson Health and Benefits, said a one-size fits all approach to benefits was rarely appropriate.
He said: "Instead, consideration should be given to how benefits can be targeted towards areas of greatest need and how traditional products, such as medical insurance, might be supplemented by more niche products that can be used to address specific health issues in a more cost-effective manner.
"Employers should start by using available health risk data and employee feedback to identify trends and the underlying root causes.
"It is then important to build a clear picture of cost and desired outcomes resulting from each area of spend. This will make it easier to measure progress, reallocate spend where necessary and provide clearer evidence of return on investment."
Further challenges to the delivery of employee benefits programmes outlined by the research include a lack of data to measure results (27 per cent), changes to statutory benefits (26 per cent), and the absence of an appropriate technology solution to deliver benefits (25 per cent).
Roy McLoughlin, associate director at London-based Cavendish Ware, said: "Part of it is getting the message across about cost. It is much cheaper than everyone thinks.
"It is also about simplicity – there is a perception that it is more complicated than it is. These things do pay out – you need to deliver that message. If I don't think insurance is going to pay out, I will not take it out.
“In the group market, we need to start talking about case studies. Early intervention – are we telling that story? People love it when it works."
simon.allin@ft.com
