How to futureproof benefits strategies
The key is to start small
Businesses should, first of all establish, what sort of organisation they are, for example, are they paternalistic? What is their culture?
This is a strong foundation for setting out clear objectives for their benefits strategy; why are the benefits there, what sort of benefits are valued by workforce, what goals do they wish to achieve?
Secondly, companies need to think about what their organisational goals are; why are they offering benefits, how do these benefits align with values, employee health, calibre of employees, or age demographic?
A common mistake is to talk about benefit strategy and then immediately leap into solution mode. If these basic components are not defined, companies will lack clarity in terms of strategic direction. They will be unable to measure the effectiveness of benefits or establish if the strategy will deliver for the organisation.
A disjointed approach leads to high levels of disengagement, with employees struggling to see the value of the company’s benefits offering. Without initial buy-in, a benefits strategy would falter and become redundant in years to come.
Businesses may want a clear-cut answer to strategic longevity, but there is no-size-fits-all solution. A strategy will only be relevant if it makes sense to the business.
The role of technology
The company perspective on technology is about reporting, reducing administration and delivering insight.
The employee perspective is about accessibility. Technology must act as a strong communications tool, enabling businesses to integrate multiple systems or information to deliver a consumer-employee experience.
It can help bridge the gap between employer expectations and employee engagement – a key objective of any benefits strategy. As a consequence, we can expect technology to feature more heavily in the future.
We are also witnessing a shift towards outsourcing, resulting in less admin-intensive, streamlined processes and the more efficient delivery of valued benefits to employees.
Shift towards product innovation
What’s driven the evolution of the benefits market is salary sacrifice and tax efficiency. Given this has significantly reduced, the focus has shifted to products and services.
In terms of the health and wellbeing agenda, there’s a huge opportunity for a raft of services that help people better manage lifestyle; but to be successful in the employee benefit corporate arena, these have to be either more accessible or heightened in terms of their offering, relative to what you can get on the high street.
There’s a particular opportunity around eldercare – and the structuring of a tax efficient approach to delivering that.
There isn’t anything on the legislative agenda that suggests it’s going to become as tax efficient as pension saving but the challenge is that many who in the Generation X bracket still have younger and older dependents.
The other area is the range and variety of health screening to encourage people take responsibility of their own health.
Establishing a sustainable long-term strategy
It’s more important for a strategy to be sustainable than putting a specific lifespan on it.
Longevity depends on the business; the volatility of their market and the dependency they have on external factors.
If a business has a strategy that’s aligned to business values and is relevant to employees, their health and the business’ aspirations for growth, and has clear overriding values to governance structure, then it is sustainable. However, if it becomes dependent on working with a particular healthcare provider, then it will limit what the business can do.
Due to external factors and the economic environment, there’s always a risk that benefits that are relevant today no longer meet the needs of tomorrow’s workforce.
Looking at benefits provision through the generational lens and the economic spectrum, and overlay with gender and seniority of grade, businesses can ascertain accurate predictors around the issues that are going to affect people.
Businesses should look at the workforce demographic to see where problems might lie. Tech firms, for example, may position themselves as young and fresh. In years to come, however, the average age of these workers will be very different – with new issues and needs that will impact them.
The majority of employers are thinking short-term and tactical. Going to market with a view to managing costs is, at best, a one or two-year strategy.
Without getting any level of data – in terms of screenings, healthcare performance, causation of absence etc – and looking at the why, businesses can’t take a more strategic view.
We’re not purely advocating a data dashboard – but what businesses do need is to spend some time looking at their data to see what it’s telling them and what their real needs are.
Mark Ramsook is head of sales and marketing at Willis Towers Watson Health and Benefits.
This article was provided by Willis Towers Watson.
In partnership with WTW
WTW is a leading global advisory, broking and solutions company.
