Wellbeing benefits used to be considered by many employers as simply a ‘nice to have’ in their benefits schemes. As benefits professionals develop a greater understanding of employee wellbeing interest in the concept is now mounting.
However, benefits managers looking to implement wellbeing initiatives will typically have to make the business case for any new perks to their finance director before they can go ahead. This is not always an easy sell as it can be difficult to demonstrate the hard financial return of offering such benefits, although the task has been made slightly easier as some insurance providers have begun to add wellbeing features to more traditional protection benefits.
Wellbeing perks now cover a multitude of options including gym membership, whether this is on site, subsidised or free, providing staff with pedometers, occupational health advice and facilities, advice on nutrition, seminars on topics such as exercise, smoking, and drug or alcohol issues, and fruit baskets and water facilities in the office. Although these typically come at a price, other wellbeing initiatives, such as offering healthy options in an on-site canteen ,for example, will cost an employer very little, if anything at all.
Tracking the return on investment an employer stands to gain from offering wellbeing perks, however, is often easier said than done. According to Building the Case for Wellness published by PricewaterhouseCoopers in February this year, there is currently no clear business case that demonstrates wellness programmes have a direct financial return or tangible business benefits.
Jill Pollack, head of corporate solutions at Bupa Health Insurance, says: “I don’t think there is any one agreed tool that people are using to measure return on investment. There are commercial models to measure things such as sickness absence, monitoring accidents, issues around engagement, recruitment and retention and customer satisfaction and underlying products that measure the health status of their employees but few employers use them. Those that do, see a return on investment [through] positive links with improved health status and the increase in their own commercial health and productivity. Other organisations may measure sickness absence but not the causes. This, [however], is a fundamental step, so they can start to see trends of illnesses and conditions and not only treat them appropriately but to identify prevention [mechanisms].”
Using such measurements in isolation to gauge the return on wellbeing benefits, however, may not deliver a full and detailed picture of their impact on the workplace. Simon Curtis, health and risk consultant at JLT Benefit Solutions, says that with initiatives such as absence management procedures employers will get data back on the reporting of absence, which can be compared with the cost of setting up the system in the first place. “[But], when you get to wellbeing benefits, it is such a huge area in terms of what people do for their staff, how can providers actually then say to the employer ‘if you put in an [employee assistance programme] EAP or give out gym membership that is going to give you x% return?’ It is a difficult thing to measure in pounds and pence,” he explains.
Instead, he says employers that adopt wellbeing programmes can benefit from, and measure, employee perceptions of the organisation as a caring institution. “If employers engender that attitude in the workplace and show they are putting their effort into helping employees, then it is likely to engender a return from employees who want to work there and won’t take time off for no reason,” Curtis explains.
Colin Boxall, corporate director of The Advo Group, says that, while, wellbeing initiatives add to the HR workload and do not always produce immediately obvious results, they may well have a positive influence on long-term profitability, particularly if improving staff wellbeing helps to reduce the number of claims that are made under benefits such as private medical insurance (PMI). “Rising costs of PMI can bring concern, but should be seen in a wider context. A rise in insurance premiums is a visible sign of usage and may therefore indicate that the policy is doing exactly what is intended. Claimants are receiving prompt access to treatment, which reduces absence and the consequent cost pressures in other parts of the business where savings are not so obvious,” says Boxall.
In order to try to limit the potential for claims, employers should identify the causes of illness and take steps to tackle them.
“Insurance usage is a barometer of the health of the workforce. A wise employer will seek to understand the underlying causes of ill-health, and use insurance policies and internal referral and absence-reporting protocols to best advantage to support employees and control overall sickness and absence,” Boxall adds.
The growing employer interest in the wellbeing market has had a knock-on effect on the insurance market, prompting a number of insurers to re-examine some of the more traditional products in order to add wellbeing elements. Steve Walker, managing director of Medical Insurance Services, says insurers have adopted wellbeing features in a big way, moving from providing bog-standard PMI policies, which are designed for employees once they are ill, to products that aim to boost employee wellbeing and so prevent illness from occurring in the first place. “A lot of it nowadays is about trying to stop staff becoming ill, especially with stress-related problems and that is really where the emphasis is coming from. All insurers are jumping on the wellbeing bandwagon,” says Walker.
Pruhealth was one of the first to adopt this wider focus on wellness with its Vitality product, through which employees can take advantage of reduced gym fees, and earn points for adopting healthy habits, which, in turn, can be translated into lower PMI premiums.
Norwich Union’s flexible PMI product Solutions, meanwhile, includes a built-in online and telephone-based health management tool offering advice and support to employees, and helping employers to manage absence problems. The insurer describes the product as health, rather than illness, insurance to concentrate on keeping people healthy rather than helping them when they are ill.
Walker adds: “Probably the most flexible policy on the market is Standard Life Healthcare’s, which offers a core PMI product, and dental, healthcare cash plan and travel modules as standalone [products] plus an EAP, GP and nurse helplines, occupational health and health screening. When you have things like that available and you have employers recruiting from overseas and workers not able initially to call on the NHS for things like dental care and childbirth, or who are travelling back and forth, those modules are useful.”
These developments in the wellbeing market are also partly due to both employers’ and providers’ realisation that different issues will affect employees’ wellbeing at various stages of their lives, says Pollack. “There is a more tailored approach to offering wellbeing services that are right for people and the focus is on identifying health risk behaviours,” she says.
Online health assessments, which focus on issues such as health, nutrition, sleep and stress can be used to help staff assess their own physical wellbeing and give an idea of areas that need work. “A lot of people are unaware of how some of their behaviours are more unhealthy than they think,” says Pollack.
But while adding wellbeing-focused offerings to traditional insurance products can be helpful employers need to be aware of what they are really getting. “There is a trend for insurers to add extra benefits to a standard PMI policy, for example, and most will have some form of helpline or stress line. From that point of view, [employers] could argue that by providing PMI to staff [they] have gone a long way down the wellbeing route. But I would rarely suggest a bolt-on or integral automatically-provided helpline is the equivalent of a full-blown EAP. You have to compare like with like and not assume that because it says one thing on the summary of your cover you have got what you think you have. You have to understand exactly what it is being provided,” explains Curtis.
Case study: Weightmans
Law firm Weightmans has embraced the move to health and wellbeing. Each quarter, its HR department runs a health drive, entitled ‘Your Wellbeing with Weightmans’. These are designed to educate, inform, and raise awareness among staff using general themed advice, health checks, massages and further insights into how to make the most of benefits.
Sue Kay, HR manager, says: “Our approach to wellbeing and our absence management strategy are linked to us being an employer of choice. If our people are fit, healthy and happy then that is a big plus for us. We like to encourage people to look after themselves and give something back.”
The firm currently offers perks such as an employee assistance programme (EAP), corporate gym membership and funding for small-scale wider health benefits. “Our EAP, for example, helps us put care into the organisation to help people tackle life’s challenges. Those challenges can put a lot of pressure on people, so it is important to Weightmans that the support network is in place,” says Kay.
Insurance broker, the Advo Group also supports the organisation by ensuring all its insurance policies are interconnected and feed into each other as well as the relevant HR systems.
“We want to be able to attract and retain the best talent in the first instance, so we do our utmost to achieve this. It is not just about paying the right salary, but about looking at new approaches to keep people engaged, and that is where our wellbeing programme links in with our reward strategy,” adds Kay.