Global Trends in Health Benefits

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By Raven Gerald

The 2008-2009 economic crisis placed the evolving role of employee health benefits firmly into the spotlight. Benefits offered in the workplace, such as health care, life insurance and retirement pensions, are invaluable tools for employers and typically have a favourable socio-economic influence. This is especially the case as governments continue to make cuts and seek savings as part of austerity programmes and in the face of meeting budgetary objectives.

At the same time, the global private sector is under increasing pressure to justify the cost and range of benefits provided to employees. In addition, there can be considerable regional variation as to what organizations are able to offer without putting their business objectives at risk.

Adapting Employee Health Benefits in Accordance with New Economic Pressures
Despite uncertainty in the Middle East, the global economy continues to grow. As a result, companies are preparing for expansion at home and in the global markets. As part of their strategic planning objectives, it is essential that these companies re-analyse the way their employee benefit schemes fit into the wider business objectives.

Although globalization has enabled many areas of industry to become more homogenous, such as with information transfer and the free flow of capital, there are still significant differences in employee benefit practices from place to place. Employee expectations, as well as what organizations are prepared to offer, will often be affected by the presence or lack of statutory mandate.

The Employee Benefits and Trends Survey 2014
In 2014, the Aon Employee Benefits and Trends Survey was carried out for the fifth year. The questionnaire, which was delivered online, was the biggest to date, receiving 430 responses from a variety of professionals, including those working in pensions, benefits, HR and rewards. The survey looks to identify how best-practice trends, both regional and global, are being used to manage goals as part of strategic investment policies.

Benefits Overview
Survey respondents were asked about their reasons for ensuring a benefits programme was in place. The top three answers were securing talent (cited as the main reason by 41 per cent of respondents), retaining talent (18 per cent) and driving productivity (12 per cent). When compared to the answers from the same survey in 2013, in which ‘meeting market norms’ was considered the second most important benefit driver, it is possible to see that there has been a fall in the importance placed upon market competition and a rise in prioritizing the retention of talent.

The latest recession drastically reduced consumer confidence and changed employee expectations where additional workplace benefits were concerned. There has been a gradual improvement in levels of consumer confidence as a result of the economic recovery. However, there remains a high degree of concern regarding financial stability and a general reluctance by employers to introduce additional employee benefits, whether these are voluntary, paid for by the company or third-party products. In more recent years, the focus has shifted from attracting talent to prioritizing methods of employee retention, such as the implementation of successful employee engagement strategies (cited by 64 per cent as a key objective). Providing attractive employee benefits has therefore been identified as an important tool in achieving this goal.

In order to ensure benefits for employees are aligned to both global and local trends, it is important that organizations regularly re-assess what benefits they are offering and the suitability of these in terms of their employee base. This is especially the case where there is a diverse or globalized workforce.

Health and Risk Benefits
Company provision of all employee-paid health benefits, including private medical cover, health cash plans, dental plans, health screenings and Employee Assistance Programmes, has increased. This suggests a general move towards a more flexible approach, tailored to the needs of the individual employee and keeping increases in premiums to a minimum. This works well as part of employee engagement strategies.

In terms of risk benefits, approaches have changed little in terms of the level and type of cover offered over the last few years, suggesting a reluctance to re-evaluate. However, given the current financial pressures, employers would do well to do so, especially considering the various legislative guidelines in place.

Online Benefits — Communications and Flexible Benefits
Flexible benefits have become a popular option, with at least 50 per cent of large employees introducing them. In terms of pensions, a large proportion of employers do not offer these as part of flex.

Online benefits are extremely popular — mainly because their method of delivery is so varied and cost-effective. Communication as a whole is considered by most employers as an important aspect of employee benefit delivery.

There is widespread agreement that a major issue of employee benefit schemes is the gap between interest and understanding. Advances in communication technology go some way towards closing this gap by providing the capabilities to make more information readily available online via laptops, tablets and smartphones. What’s more, there is now the opportunity to personalize this information. Enabling employees to access personalized benefits information, at any time and anywhere, provides employees with the means to track their personal benefits objectives and can only increase and maintain levels of employee engagement and, as a result, employee satisfaction.

Enhanced understanding will also increase transparency and ensure benefits offered are appropriate for today’s diverse workforce.

Pensions
The sorts of pensions offered remain very similar to those outlined in previous Aon Benefits and Trends Surveys, with a predominance of group personal pensions plans.

Communication is seen as a vital aspect in tailoring products to individual employee needs, and the current tendency towards a blanket approach may well begin to evolve into a more customized method of delivery.

Raven works as a freelance HR Consultant that has over 10 years of experience working with international organizations. You can find Raven’s most recent articles and opinions at The Benefits Lounge. Also, feel free to follow him on Twitter – @RavenGerald82.

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