Richard Holden, Commercial Director at Health Insurance specialists Chase Templeton looks at how private medical insurance can help business recruit and retain the best employees.
As the economy strengthens and businesses increasingly look to bolster their workforces, competition to recruit fresh talent can only increase. What’s more, as employment opportunities increase so too does the possibility of existing talent being tempted by the offering of your rivals.
So if you’re a business owner or manager how fit do you think your company is to retain and recruit the staff that fuel your success? Arguably it’s never been more important to have a competitive edge in HR – but with corporate purse strings still often necessarily held tight how can you achieve it?
One way is to look not just at cost of a salary, but the additional benefits you might offer as part of a wider and yet affordable package. You might find too that such a package might not only help with recruitment and minimisation of staff turnover but help you better manage absenteeism and boost productivity
This might sound like some corporate pipe dream but it’s not. Introducing a benefit such as company health insurance can prove massively beneficial. In 2010 the World Economic Forum published the findings of international research spanning nearly 29,000 corporates. The findings were striking. When organisations were found to be actively promoting health and wellbeing respondents said their employees were eight times more likely to be productive and engaged. Furthermore they were four times less likely to lose talent over the following year.
In its 2014 Absence Management Survey, the Chartered Institute of Personnel Development (CIPD) also noted that:
“Ignoring employee health and well being can result in significant costs to an organisation in terms of sick pay and temporary staffing cover as well as having a negative impact on employee morale, colleague workloads and ultimately business productivity.”
The CIPD found that on average businesses lost 6.6 days through absence per employee annually. It put the cost, again per employee, at over £600. The majority of those absences – some two-thirds – were short-term, being of seven days or less. And the biggest cause of absence? Minor illness.
Interestingly it noted that the average absence figure had fallen year-on-year whilst the number of businesses enabling line managers to manage absence had soared from just 39% in 2013 to 61% in 2014. Businesses are thus increasingly aware of the need for, and benefits of, absence management strategies.
So why might private health insurance help – and more specifically how might it help your business?
A key benefit is that you would be able to guarantee your employees enjoy prompt access to specialist clinicians, ensuring swift diagnosis and treatment. This in turn can enable them to return to work more quickly, reducing your spend on temporary cover and the costs associated with loss of productivity.
Many policies also incorporate wellbeing programmes and enticements to healthier lifestyles to encourage employees to engage with their health, which can help prevent staff getting sick in the first place.
In addition employees value health insurance as a benefit. Last summer HR Magazine reported that 50% of employees would find company medical insurance “personally valuable” – 9% more than said the same for occupational or workplace pensions.
Another benefit for employees is that, unlike individual private medical insurance, company schemes are typically not medically underwritten so they need not go through questionnaires and declare pre-existing medical conditions. The latter – cancers, heart conditions etc. – will usually be included as long as they fall under the policy’s remit.
And, whilst your employees see health cover as a “free” benefit, with their only liability being tax through provision of “a benefit in kind”, the cost per employee to businesses is relatively low. By the very nature of a group policy, the economies of scale of a group medical policy will deliver the cost benefits of bulk purchasing.
Finally, with the assistance of specialist and impartial advice, businesses of all sizes can take advantage of, for example, policies specifically designed for SMEs. A good adviser can also help design a bespoke scheme so you can tier the availability of benefits to particular roles or length of service.
So if you’re looking to recruit, retain, reward and reap rewards, isn’t it time you looked at introducing a private health insurance scheme to your business?