Employers are looking at the wrong end of the health cycle
You can see why employers are in their circular pattern. With group risk claims on the increase, employers are under more pressure than ever to address the health issues of their workforce. Earlier this month, industry body Group Risk Development (Grid) reported that nearly £1.5 billion was paid out by the industry during 2016, an increase of £100million since 2015.
And in February, a new report by the Institute for Public Policy Research (IPPR) revealed that around 460,000 people move from work to sickness and disability benefits each year, costing employers £9bn a year in sick pay and other associated costs.
Indeed, the case for addressing the increase in claims was the main focus of the IPPR’s report, particularly given the cost to the economy and government. They predicted that the UK’s sickness benefits bill could rise as much as £17bn by the end of 2020, a sobering figure for any level-headed employer.
Are employers wasting their money?
Employers continue to spend hundreds of thousands of pounds on disability benefits and death-in-service benefits and only a fraction of their budget on occupational health. As a society, we’ve been focused for so long on the back end of the health cycle and aligning budget to dealing with claims, many employers are convinced they don’t have the budget for health and wellbeing schemes.
Yet the warning signs, or eight behaviours, as identified by the World Economic Forum in their 2010 study are the main drivers of the most common chronic health conditions and account for up to 80% of health claims worldwide. And they give us clues on how to support staff and the organisation.
These behaviours - poor stress management, insufficient sleep, smoking, excessive alcohol consumption, poor diet, physical inactivity, poor standard of life care and lack of health screening – are the main drivers of the most common chronic health conditions and account for up to 80% of health claims worldwide.
In simple terms, employers should be thinking up the chain of illness, helping individuals understand what their risk profile is, whilst helping the company to facilitate intervention to bring about a change of culture. Data plays a key role in this.
However – and rather ironically - it appears to be data itself which is the stumbling block for many employers. Employers are holding huge amounts of the stuff and they are aware of its importance and the value it can bring – it provides a crystal clear picture of health risk demographics, for instance - yet employers are failing to utilise their data in the right way.
Data is not being used to drive strategy
In fact, evidence has shown that data is not being used to drive strategy. Global research by the Top Employers Institute and HR consultancy firm Bright & Company revealed that just 24% of HR professionals rate themselves as ‘advanced’ at HR analytics whilst just 7% rated themselves as ‘expert’.
It seems then, that both employers and HR are missing a trick. Analytics can provide vital insight into the health makeup of an organisation. It can help understand absences, it can identify the root cause of staff sickness, it can keep healthy staff healthy and it can deal with presenteeism. With this knowledge, insight can be converted to drive organisational strategy.
Utilising this wealth of data to obtain a clear picture of the workforce’s health risk profile doesn’t have to complex, nor does it have to be resource-hungry. Data can be pulled from a myriad of available sources.
Benefits claims data in particular, gleaned from providers of medical insurance, income protection, health screenings and so on, can be a good place to start, particularly as it can flag up prevalent health risks and areas of the business which are particularly susceptible to claims.
Absence data too, can provide valuable insights into absence trends and health risks, whilst advanced behavioural data, which looks particularly at the eight key behaviours which can lead to chronic conditions, can help guide future strategy.
The onus therefore, is absolutely on employers to get to grips with data if they are to leverage its power at organisational level. With data, they can move to the right end of the health cycle – that is, the end which provides clues, insight and ultimately, knowledge, on workforce health demographics. The old idiom, knowledge is power has never been more true than in the context of data and analytics.
Mark Witte is principal at Aon Employee Benefits. Hear hom speak at the Employee Wellbeing Congress on 22 June 2017
This article was provided by Aon Employee Benefits.
