Coronavirus only proves that SMEs need employee benefits

Employee benefits have already proven their worth during the Covid-19 pandemic, but Steve Herbert believes they’ll become more important to employers of all sizes – not just large ones – in the months ahead.

I first joined an embryonic UK employee benefits industry in the mid-1980s, and back then the range of benefits offered to the vast majority of small and medium-sized enterprises (SMEs) was really rather limited. Indeed, the benefits available to such employers and their workers rarely extended beyond group life assurance and, if employees were very lucky, a company pension scheme. And most smaller employers didn’t offer anything at all outside of salary, overtime, and a season ticket loan.

A third of a century later, the array of benefits now on offer to employers of all sizes is frankly vast, with tools that (if used correctly) can help employers improve the mental, physical, and fiscal health of their workers, reduce absence rates, and improve engagement and productivity. This seems like a comprehensive business case in itself, and often appeals to the more strategic HR professionals of today.

Investment return

The desire to implement these multi-faceted, tools is often blunted by the understandable employer concerns of how to demonstrate the return on investment of such an approach.

ROI is a difficult thing to gauge in any business transaction, and more so where an element of insurance is central to the offering, because it often only shows its full worth in the event of a claim. Large employers experience such situations on a fairly regular basis, but for smaller employers it’s quite possible for several years to pass without a major workplace health issue arising.

As a result, SMEs often have little direct experience of the problems associated with workers’ physical or mental illness, long-term absence, or indeed the death of a colleague. Without that reality check, many smaller employers simply fail to implement a benefits package that would really help protect the employer, its workers, and their dependents.

And then along comes something as wide-reaching, vicious, and unexpected as Covid-19 and makes the reliance on a hard business case at the point of purchase rather redundant.

Tangible evidence

The UK’s death toll from Covid-19 includes many from the working age population. Figures recently collated by the Group Life Assurance Industry suggest that in the six months to the end of June 2020, the industry had paid out more than £57m in Covid-19 related death claims to more than 480 bereaved families. These payments were made at a time when so many employers might have genuinely struggled to find the money to provide any form of fiscal compensation to the loved-ones of a deceased employee.

This is a clear example of the value of at least one benefit – group life assurance – but it now seems likely that the importance of several other employee benefits will become all too obvious to employers before this crisis is over.

Long Covid

Despite the media focus on lives lost to Covid-19 , it is becoming increasingly apparent that the coronavirus mortality numbers are only part of the story. Indeed, it’s clear that many thousands of people in the UK will suffer a range of lengthy post-infection symptoms, some of which might well prevent them from working for months, even years to come – so-called ‘Long Covid’.

Health secretary Matt Hancock earlier this month: “The long-term impact of Covid is not very well correlated with the severity of the initial illness… this is not just about people that have been hospitalised… it doesn’t matter how serious your infection was initially, the impact of Long Covid can be really debilitating for a long period of time”

And indeed there is a growing weight of evidence to support this claim. The Long Covid website suggests there have already been at least a quarter of a million people in the UK who have experienced effects of the virus lasting for more than 28 days. As Hancock suggests, many of these were not hospitalised initially, and some didn’t even have a Covid-19 test.

With so many already experiencing long-term conditions – including lung scarring, post-traumatic stress disorder, or even just a general and debilitating post-viral fatigue – it seems likely that the next health challenge for employers could be lengthy absences from the workplace. Such conditions can happen regardless of age or underlying health conditions, so no employer or workforce is necessarily immune to this new and perhaps more widespread concern.

Yet it would be a mistake to focus on Long Covid as the only possible source of longer-term workplace absence. Other health conditions persist of course, and many not diagnosed or treated during lockdown are likely to be more severe in nature.

When taken in tandem these two issues suggest that longer-term sickness absence might soon be on the increase at a time when all employers need at maximum productivity to escape the economic shock of lockdown and the current Covid restrictions.

Waiting lists

There is likely to be a further issue for employers ahead. NHS waiting lists are set to hit 10 million by the end of 2020, through a combination of the lockdown-backlog and the challenges providing functioning healthcare during the ongoing pandemic.

The problem is that treatments that might now be subject to the longest waiting times are often conditions considered non-urgent or life threatening. A non-life threatening condition usually remains extremely problematic to the patient. At best, minor conditions might limit some of the individual’s daily routines or output; at worst they could be serious enough to involve a long absence from work. Either outcome is potentially damaging for employers looking to bounce-back to profit.

Benefits armoury

There are no easy answers, but employers should ensure that they throw everything within their existing employee benefits armoury towards solving – or at least mitigating – the problems.

Occupational health and early intervention services, often provided with group income protection plans, can help assess the situation and provide a roadmap for an early return to workplace where possible. And employee assistance plans can provide valuable free advice to steer employees towards appropriate solutions and planning too.

Tools such as private medical insurance and health cash plans should speed access to healthcare solutions and treatments, avoiding the worst of the NHS waiting lists and delays in the process.

And should the illness be one that might result in an absence from the workplace for a period of months or years, then the provision of group income protection polices will provide some certainty of income to the worker, whilst also enabling the employer to look at alternative options to cover the absent employee’s workload with less concern around the costs of doing so.

An easier case to make

Making the case to maintain or expand an employee benefits package may have just become that much easier for HR professionals – even those at SMEs with rather limited budgets.

Long-term absence or the loss of an employee is damaging to any workforce and its productivity, but is likely to be disproportionately worse for SMEs that may have fewer resources to absorb and respond to that situation. This alone suggests the need for adequate employee benefit provision should be a higher priority right now.

And, regardless of employer size, it’s worth highlighting that the Covid-19 pandemic might not be the “once in a century” occurrence we would all hope it to be. Speaking to the BBC earlier this year, Professor Matthew Baylis said: “In the last 20 years, we’ve had six significant threats – SARS, MERS, Ebola, avian influenza and swine flu… and this is not the last pandemic we are going to face.”

I believe this makes the case for employers of all sizes to look again at their employee benefits offering.

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