Seven employee benefits trends to watch in the near future

Changes are occurring in the UK employee benefits market, according to John Dean, managing director of Punter Southall Health and Protection and Cheryl Brennan, director of Corporate Consulting.

The workplace is changing and advances in technology, political opinion and social expectations means managers need to keep up to date with what is happening in their office. Employee benefits and expectations are continuing to rise as more workers are getting clued up on what benefits they can demand.

John Dean, managing director of Punter Southall Health and Protection and Cheryl Brennan, director of corporate consulting, discuss.

What new trends can we expect in the near future?

1. Insurance companies will evolve more into ‘Wellbeing Companies’

John Dean says, ‘Insurance companies will evolve into wellbeing companies. While traditionally insurers have concentrated on premium rates and insurance terms, their focus will change. They will provide wider support and offer new propositions to customers including data analytics and wellbeing services, not just insurance.’

2. A demographic ‘tipping point’ that is driving change in benefits

Cheryl Brennan says, ‘We are at a demographic tipping point. For UK employers the biggest risk is our ageing workforce and the expected increase in comorbidity. In a 2012 research study, the National Council of Compensation Insurance (NCCI) looked at the impact of comorbidities on workers’ compensation claims. It found that the percentage of workers’ compensation claims with a comorbid diagnosis, such as diabetes, hypertension and obesity, increased from 2.4 per cent to 6.6 per cent between the years 2000 and 2009. We expect this trend to continue.

‘Comorbidity risks present themselves to employers through higher absence rates, longer absence durations, more complex medical treatment and insurance costs.

‘Employers will need to reduce the risk of comorbidity by tackling and reducing exposure to conditions such as Type 2 Diabetes by promoting health and wellbeing.’

3. Will the increase in part time workers lead to insurance benefits not being linked to salaries?

Dean says, ‘The number of people doing the standard 40-hour work is falling. According to Reed Job Index part time job opportunities have risen to a three-year high. This makes it complex for companies to work out the costs of their benefits. With flexible and part time working on the rise, employers will be looking to simplify things and we are likely to see more flexible benefits such as ‘lump sum’ life insurance being offered rather than companies linking benefits to salaries.’

4. Mobile-enabled ‘In-your-pocket’ health services will grow

Dean says, ‘Advances in technology will enable employees to access benefits anywhere, at any time and on any device. We’re seeing a big growth in ‘in-your-pocket’ GP services and blood pressure diagnostic services. These services are here to stay so all suppliers will need to ensure their services can be mobile-enabled.’

5. Could more health data change the insurance marketplace?

Dean adds, ‘The growing availability of health information and the rise in health screenings, DNA testing and genetics testing is making us a more knowledgeable society. Soon we will be able to check our propensity for any potential future illnesses. This knowledge presents a big challenge to the insurance industry as possible buyers will already know their propensity to become ill. Insurers will have to adapt to these changes otherwise premiums will have to rise substantially.’

6. More focus on prevention and support for employees

Dean concludes, ‘Currently, employee benefits programmes focus on supporting those who are ill or dying. In the future programmes will focus increasingly on wellbeing – providing solutions for the majority, rather than just those who are ill. There will be greater concentration on keeping the healthy well rather than simply paying for the ill.’

7. Employee benefits for employees of all ages

Brenan says, ‘Managing the polarised needs of multi-generational workers will be another challenge this year. The needs of 20-something employees are very different to the over 60s and ensuring the design and delivery of benefits is relevant for each age group will be vital.

‘We could see companies providing greater financial support to help younger workers get a foot on the housing ladder or benefits such as home help services to support employees looking after elderly parents or companies offering childcare services in greater depth – this will be an interesting area to watch.’

‘Technology will play a huge role in delivering benefits and no longer will it be about what are the most cost-effective benefits for the employer, but what delivers the most value for their employees,’ she concludes.

Further reading on employee benefits

What benefits do staff want?


Oval Financial Services’ Debby Hannaford explores how focus groups and surveys can be used to gain constructive and positive feedback about employee benefits packages.

There is little value for any business in offering benefits to its staff that are not appreciated, particularly in a small business where the funds available for benefits may be limited.

Surveys and focus groups are a useful means of discovering employee attitudes to a range of workplace issues, including employee benefits.

In designing a survey, it is essential to have a good idea of what it is that you want to achieve and to design the questions accordingly. If staff are asked: ‘What benefits do you want?’ the likely outcome will be a confusing range of ideas, many of which would not be practical.By contrast, if employees are asked what they think of their current benefits, whether they understand them, how important they feel they are and ultimately if they value them, this can be a good starting point.

It may be that the current benefit offering is not well understood. Initially, it might be worth re-communicating existing benefits before introducing anything new. If a company is looking at introducing new benefits, it might be a good idea to offer two or three practical options and see which is most popular, rather than simply asking: ‘What do you want?’

The options that are offered might depend on a number of factors, including budget, and the demographic make-up of your organisation. For example, if there are a lot of young mothers, childcare vouchers are likely to be popular, whereas a company made up of young single men is more likely to value gym membership.

Communication at all stages of the consultation is the key to successful outcomes. If employees understand what the purpose of the consultation exercise is, and can see what is in it for them, they are more likely to contribute. Feeding back the results of a survey, and subsequently communicating any changes that are going to take place, helps ensure engagement with the process.

Finally, it is worth considering that if a company goes through the process of consulting its staff but doesn’t act on the outcomes, it runs the risk of disillusioning its staff and making them feel they aren’t listened to.But a well-designed consultation should ensure a result which is both realistic for the company and valued by its staff.

Debby Hannaford is ReWard Director for Oval Financial Services

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