Recent survey results shine a light on where health benefits rate in employ perceptions of importance. Stewart Sweda, Chief Officer of sales and marketing at Munroe Sutton summarises.
As many organisations choose to freeze pay rises, reward and bonus. HR Directors should take another look at benefit schemes. The evidence, according to surveys, suggest that medical benefit schemes can successfully reduce absenteeism and improve employee retention, as well as boost the morale of unmotivated workforces.
A recent study in America found that companies focused on supporting and improving employee health reduced their costs by an average of $1,500 (about £940) per employee, due to a significant reduction in absenteeism. It is clear medical plans may not be able to help with every sick day an employee needs to take, but figures like this represent a significant and undeniable saving for the employer, as well as a positive outcome for the employee.
In addition, according to a survey carried out by the Chartered Institute of Personnel and Development (CIPD) the average cost of absenteeism per employee in the UK has increased over the past year, rising from £666 in 2008 to £692 in 2009; with only 41 percent of the respondents regularly monitoring the cost of employee absence. It is believed that by putting a cost on absences, as well as highlighting the potential savings, will encourage UK employers to improve their people management practices, which may include the implementation of a medical benefits scheme.
Despite the obvious benefits comprehensive medical schemes are bringing to businesses in the states, recent figures show that businesses in the UK are reluctant to employ the same tactics. According to a survey of 200 UK based businesses, more than 40 percent of UK organisations do not have strategies in place to tackle staff absenteeism. Despite this discovery, nearly 50 percent of the organisations agreed that staff well-being is an important aspect to the business, and among their top priorities.
However, with motivation at an all time low, tackling absenteeism is not the only issue employers have to consider. Many organisations also consider employee retention to be an important factor that contributes to their ongoing success. In this instance, a medical benefit scheme can prove to be an important aspect for many employees. In a recent study, 82 percent of employees stated that a comprehensive medical scheme would encourage them to stay with their current employer, proving a well-presented benefit scheme is well received by the majority of staff members.
It is also prudent to remember how attractive such a scheme is to new staff. Whilst, due to the economic climate, many organisations are not taking new team members, when the recession draws to a close, this will undoubtedly become a consideration once more. The same survey illustrates that medical benefit schemes are just as popular with new staff, with 70 percent of employees admitting that healthcare benefits in the workplace were a major factor when they accepted their current role within their organisations.
In short, whilst many US organisations are reacting to staff wishes regarding medical benefit schemes, UK businesses still remain reluctant, despite evidence highlighting the benefits of change. The CIPD research illustrates that only 22 percent of the total 642 respondents predict their organisation is likely to increase employee well-being spend in 2010. This is a dramatic decrease from the 2008 survey, in which 39 percent of employees predicted an increase in funding allocated to this particular area.