Meeting the changing expectations towards employee benefits

Our own experience of home working, plus our expertise in offering employee benefits advice, gives us a unique insight into the world of workplace benefits and how things need to change in the Covid-19 era.

First, we need to realise it is not a case of when workers will return to the office after the pandemic but if they will; and even if they do, will it be full time?

Almost half (45.7) per cent of employees currently working remotely due to the pandemic were either fairly keen or very keen to return to the office according to a recent Drewberry survey.

Employers will have to have to think carefully about whether not investing in workplace benefits is a false economy

However, they did not want to do so full time – just 13.5 per cent of respondents wanted five full days back in the office. The most sought-after split was three office days and two at home – 27.2 per cent of workers said this was their post-pandemic working preference.

Working patterns

This will obviously change the way employees use benefits, and also make certain benefits more important for employers to offer than others.

For example, employees working remotely alone, and perhaps not necessarily complying fully with occupational health standards, could mean a rise in mental health concerns and back/joint pain. Employers will therefore have to consider whether they have the right processes (and benefits) to prevent such issues or offer assistance if they arise.

Fortunately, a recent response from insurers – namely improvements to their free additional benefits – are likely to be a big help in this area.

These can include telephone counselling, digital GP appointments and even remote physiotherapy. Employers are increasingly enquiring about these as separate benefits. The industry will have to keep up as demand shifts.

Employee expectations

Another new trend is changes to what employees expect from employers. Employers will have to adjust to a world where a majority (51.1 per cent) of workers now want benefits that improve health and wellbeing, for example.

However, despite this, less than half (47.4 per cent) of companies provided new benefits in 2020. Even among those that did, flexible hours and work-from-home options topped the list rather than benefits employees actually want.

To encourage wider take-up, we as an industry must do more to promote the positives of benefits – including stressing the value for money many policies offer thanks to free additional benefits – while also exploring options to offer benefits packages to employers tight for cash due to the pandemic.

In the meantime, individual advisers will likely see a greater opportunity. Unmet employee demand for benefits indicates a potential gap they could fill with individual plans.

In listening to employees’ growing demand for benefits, employers will no doubt ask – with some merit – whether it is right that they are expected to pay for services similar to those that employees should get from the state funded by general taxation.

Employers will have to adjust to a world where a majority (51.1 per cent) of workers now want benefits that improve health and wellbeing, for example.

The NHS means that in the UK, Health Insurance and remote GP services (demand for the latter saw a staggering percentage rate increase of 264.2 per cent between 2019 and 2021) are simply ‘nice to have’. They are not essential – much of the growth in demand for them is related to coronavirus and worries about healthcare access during the pandemic.

Yet the NHS has faced lower annual budget increases over the past decade compared with previous periods, plus an ageing population. It therefore faced pressure even before Covid-19 struck.

Employees expecting healthcare benefits to partly replace the NHS is a very Americanised view. Is that the path we want UK healthcare to tread?

As insurance advisers, growth in demand for employee benefits as a good thing. However, we do worry that growing clamour for benefits abrogates personal responsibility for individuals to protect themselves.

While it is obviously desirable for employees to have employers pay for protection, it is rarely a substitute for tailored, individual policies that exactly meet a client’s needs.

For example, imagine a death-in-service scheme paying three-times salary. That is great, but would it both repay workers' mortgages and ensure their families are financially secure? This is unlikely, which just underlines the demand for personal cover over and above the base level of protection offered by workplace benefits.

Tailor made

With this in mind, insurers could perhaps consider giving employees the opportunity to tailor their policies to meet their individual circumstances. This is currently only available at the largest companies with the most employees.

Another issue the industry could address is creating ‘portable’ benefits. Currently, benefits do not follow workers. If they move on or are made redundant, they lose coverage.

It is already possible to convert certain plans, for example shifting company-paid relevant life insurance to a personal policy, or retaining group health insurance after retiring or leaving your employer.

However, this is not usually true for group risk. One area the industry could examine is whether it is feasible for all group policies to be convertible when an employee leaves an employer.

Clearly, so much has changed in such a short period that the industry will have to adapt to meet the future needs of both employers and employees.

Employees expecting healthcare benefits to partly replace the NHS is a very Americanised view. Is that the path we want UK healthcare to tread?

Given interest in many services that currently come free with group insurance, such as remote GP appointments and counselling sessions, insurers would likely benefit from introducing such benefits as separate, standalone policies in their own right.

Meanwhile, the rise in demand from employees for workplace benefits puts increasing pressure on employers to live up to workers’ expectations. Employers will therefore have to have to think carefully about whether not investing in workplace benefits is a false economy.

Overall, 2020 saw such disruption in the world of work it is unlikely that things will ever return to the status quo. Likewise, the same must be true for employee benefits if they are to retain their standing and meet employer and employee expectations in an evolving world.

Drewberry’s brand new Employee Benefits & Workplace Satisfaction Survey 2021 is the second edition of this survey. The first edition was released in 2019. The survey questioned 2,000 workers at the UK’s small-to-medium enterprises.

Tom Conner is a director at Drewberry