11 January 2023
When the lockdown began in the spring of 2020 nobody could have predicted the seismic changes the pandemic would have on the way we work and the impacts it would have on the expectations of employees. The soaring rate of inflation and cost-of-living crisis have compounded the challenges for businesses and their staff.
We consider some of the implications and how they are affecting the employee benefits market – does a winter of discontent beckon?
The Great Resignation, re-evaluation, attrition, or attraction?
At the start of the year Lesley Attwell, one of our Senior Employee Benefit Consultants, assessed The Great Resignation and what businesses could do to mitigate the risks. Since then, there has been little sign that things have changed with 40 percent of workers recently surveyed saying they are thinking about leaving their positions in the next three to six months. You can take your pick to your ‘Great’ of choice – resignation, re-evaluation, attrition or even a positive, in the form of attraction. Whatever position you take on this, it’s clear that we have experienced a situation of profound change. As Elon Musk has found at Twitter, employees want to take personal control of their future and are willing to vote with their feet and seek opportunities elsewhere.
How does the benefits market look?
Swiss Re’s Group Watch Report gathers data from a number of companies in the corporate market. The report paints a picture of positive market performance with increased coverage across all three policy lines; group life, long-term disability income insurance and critical illness insurance.
They found that a record number of people were insured. A 5.9% year-on year increase saw the number insured rise from 13,317,249 by the end of 2020 to 14,106,854 by the end of 2021. The number of in-force group risk policies also increased by 4.1% from 81,055 in 2020 to 84,369 in 2021.
The report also picked up on greater usage of services, primarily driven by employee & family assistance programmes (EFAPs) and the growth in services offering virtual GPs. This raises interesting questions about the future of benefits and changing requirements and a desire to meet the needs of hybrid and remote workers. We are also seeing evidence that clients want more sophisticated EFAPs with more comprehensive support services.
The Tech industry is a good bellwether as it is traditionally pioneering in Employee Benefits solutions and supporting employees, regardless of their sex, gender and roles. Wellbeing has been at the top of the agenda for the past 3-4 years, peaking in the middle of the pandemic. More recently, employee engagement has dominated and we expect it to remain high on the agenda for some time.
New topics have emerged such as: menopause support and parental support. Different employers offer different levels of benefits to their employees, from consulting apps through to a review of parental leave policies.
Also, it is not just younger people who want more flexibility, choice and control, rather than simply annual enrolment. Again, it is the tech industry leading the way with “greater interaction between employees, including benefit suggestions facilitated by artificial intelligence (AI)-powered chatbots and virtual assistants, is already on the horizon.”
We are seeing clients who are keen to add further enhancements to their benefit package to attract and retain employees such as dental, optical, wellbeing and cash plan. There has been an increasing up take in cash plans where employers looking to provide a lower level of cover can allow staff to claim back physiotherapy, prescription charges, dental & optical costs. At Verlingue we will continue to assess needs and requirements across the market and advise clients on what developments can be expected.
Hybrid and remote working post-pandemic are having a profound effect on the Employee Benefits market. Employees are taking greater control of their destiny, evidenced by The Great Resignation. Engaging with employees has truly become a two-way street. The businesses who attract and retain staff will be the ones that appreciate the physical, mental, developmental, and family needs of their employees.
If you would like to discuss any topics raised in this newsletter, please get in touch with your Verlingue benefits contact.