Employers want their workforce to be healthy, but although most offer some type of wellbeing benefit, their health strategies aren’t always joined up to the reward, says Peter Crush

health insurance

There’s not a single organisation in the land that would disagree with the sentiment that having a happy and healthy workforce matters hugely. As employers know only too well, sickness absence costs UK firms more than £29bn per year (average sick days are 9.1 per employee per year), while in the most recent report by the chief medical officer, it’s sick days lost to ‘stress, depression and anxiety’ that have really been growing. These are estimated to have increased by a staggering 24% between 2009 and 2013.

Sentiment is all well and good, but are employers really doing anything about offering well thought-out and comprehensive health and wellness benefits?

This was just one of the questions Reward’s exclusive research with Medicash sought to answer when it interviewed 100 HR directors and reward heads at the end of 2015 – and the results show that the provision of health and wellness initiatives isn’t necessarily accompanied by a cohesive strategy.

The positive news is that nearly three quarters (74%) of the HR heads questioned offered at least some sort of healthcare benefits to staff, with 64% having access to occupational health services.

The benefits most likely to be offered are Employee Assistance Programmes (EAPs), with some form of health screening following next and then a selection of voluntary (ie employee-paid) benefits. Benefits most likely to be fully employee-paid or part employee-funded are health cash plans, cycle-to-work schemes and dental plans. And the evidence is clearly that organisations provide these for noble aims.

The top two reasons for providing health benefits were cited as cost savings through reduced absence (37% of respondents) and to have a more productive workforce (36%). The third-placed reason (not far behind, by 34% of respondents), was also for the retention benefits bosses thought it offered.

Formulating a real strategy

However, scratch beneath the surface, and there are responses that are much less salutary. A significant 33% of organisations said they bought benefits through the HR team without any other external advice – and the indication is that this is the cause of a strategic vacuum. For just 21% of HR respondents admitted they had any sort of ‘long-term strategy’ for why they bought the health and wellness benefits they did.

This should be a wake-up call. A third of organisations report they’re intending to spend even more on health-related benefits this coming year (just 4% say they’ll reduce it) – but increase it based on what?

For not only do the results suggest there a lack of strategic thinking about the benefits they buy, but the inference is that there is also a lack of measurement and reporting on the results of what they already have. According to the data more than one in ten (11%) of organisations do not measure the success of their benefits at all, and the top mechanism for measurement (30%) is a rather crude ‘staff uptake’ figure.

When it comes to more detailed analysis (for instance, data slicing and dicing, and further analysis of specific groups of employees), only 22% use management information provided by their supplier.

It’s clear from the results that a cultural change is needed in the collection, management, interpretation and dissemination of company heath (and ill health) data. Health/sickness data seems to be devolved to the line, when it should arguably be collated from the centre. Of the HRDs polled, some 57% of them said line managers were responsible for monitoring and reporting sickness, compared to the lower 32% where it is done by HR.

While some might argue line managers are much closer to their staff, and so are best placed to monitor sickness (indeed, 64% of line managers vs 8% HRDs are responsible for identifying stress), the concern is that HR is not taking ownership of this data.

The research also reveals, for example, that most organisations don’t monitor different types of sickness absence (such as musculoskeletal) at an organisational-wide level. In addition, only 28% of respondents use their sickness data to drive their healthcare strategy. Just 2% of organisations said they plan to introduce monitoring in the next 12 months.

But is it all doom and gloom? An overwhelming 84% of respondents said they believed staff valued the healthcare benefits they were being offered, and further good news is the fact staff can look forward to more health benefits in 2016.

As well as more companies pledging to introduce EAPs, group income protection, health cash plans and even health and wellbeing coaching are among the most popular benefits being promised for the New Year by HR heads.

Taking ownership of the planning

Although none of this arguably distracts from what is possible, the key message of this research is that HRDs must take more (and better) ownership of the planning, buying and measurement of health and wellbeing benefits in their organisations. A telling statistic is that 18% of respondents admitted that members of their senior management were not convinced of the value of health spending – surely a reflection of HR’s inability to demonstrate return on investment in an understandable way.

On a positive note, HRDs do instinctively know why health and wellbeing benefits matter. The survey revealed 31% believe the advantages to their company of having good health benefits are that they ‘improve the profile of the company on the market’, while a further one in five say they enable them to ‘recruit better quality staff’.

An understanding for providing great health benefits is evidently there at an anecdotal level. But what this survey clearly reveals is that the challenge for HRDs in 2016 is to convert nice sentiment and well-meant offerings into the hard and fast return on investment and analysis that chief executives require. HRDs should also be increasingly demanding from their suppliers, too. The big question is, are you ready to meet this challenge?