LONDON – 19 May 2020 – Two-fifths (42%) of companies have made, or are planning to make, significant changes to their benefit programmes as a result of the COVID-19 pandemic and the impact it has had on the way people work, according to a study by Willis Towers Watson. A third of employers are also likely to revise their healthcare strategies for 2021.
Willis Towers Watson’s survey of UK employers found that many firms are anticipating significant cost increases in the benefits they provide employees. Nearly half (44%) are expecting sick leave costs to increase, while over a third (34%) think that Group Life Assurance and Dependent Pension costs will also rise. A quarter (25%) are expecting an increase in healthcare costs and Group Income Protection and (37%) are planning to review the way their medical benefit plans are designed.
For those employers who have had to furlough some staff, almost all - between 87-98% depending on the individual benefit – are maintaining existing benefits for furloughed employees.
The COVID-19 pandemic will prompt big changes in employee benefit programmes for many companies.”Kevin Newman,
managing director, Willis Towers Watson UK Health & Benefits
Kevin Newman, managing director of Willis Towers Watson’s UK Health & Benefits business, said: “The COVID-19 pandemic will prompt big changes in employee benefit programmes for many companies. Some will be forced to get better value from their benefits, both from a cost and communications perspective. Some will look to enhance certain areas and dial-down others as priorities shift. But most companies at some point are likely to look at what they currently provide employees and ask, ‘are these benefits still relevant and is the balance still right for the new working environment?’”
With two-in-five employers making, or planning, benefit changes and a third of companies looking at their healthcare strategies for next year too, there are key areas that companies are focusing on to make sure their benefits programmes are fit for purpose during and after the pandemic.
Encouragingly for employees, more companies are looking to enhance certain benefits than reduce them. Specifically, top priorities for enhancing benefits include: wellbeing programmes (60%); mental health and stress management services (58%); annual leave policies (26%); and voluntary benefits (23%).
Benefits most likely to be reduced include: annual leave (8%); Retirement benefits (5%); health care benefits (4%); and sick leave (4%).
In addition, over a quarter (28%) of employers have taken action to measure employee anxiety during the current period, with a further 47% planning or considering this action. Furthermore, two-in-five (39%) employers have provided, or expanded, access to telemedicine and a small proportion (7%) will be facilitating access to COVID-19 testing.
Newman said: “More companies are looking to enhance benefits than reduce them as a result of the pandemic. But areas such as annual leave appear to be a priority for expansion for some and reduction for others, showing the divergent circumstances different employers find themselves in.”
In addition to adapting employee benefits to suit the needs of the workforce, employers are also keen to make the most of existing benefit structures by communicating their relevance for this pandemic period as clearly as possible.
Almost two-thirds (61%) think that communication of benefits and wellbeing programmes will be a top priority this year. Top of the list for awareness raising are Employee Assistance Programmes (79%); online mental health services (65%); and Wellbeing apps (47%).
Newman said: “Re-shaping and re-planning benefits will be important, but most elements of a company’s employee benefit programme will continue to serve their employees well if the relevance is communicated effectively.
“In times of stress and uncertainty, Employee Assistance Programmes and mental health services become even more important and employees that haven’t used these services in the past may need reminding that companies often have a network of valuable support services available to employees.”
Willis Towers Watson surveyed 177 UK employers between 20th April – 1st May 2020.
Willis Towers Watson’s Health & Benefits team helps clients to cut the cost of employee illness, minimise levels of sickness absence and retain good staff. It offers employee benefits packages, healthcare insurances, employee assistance and stress management programmes, health screening and absence management initiatives.
The company also helps employers reduce the frequency and cost of claims made on healthcare or income protection policies through its specialist nurse-led claims management team. By giving employees expert support during an absence, the company is consistently successful in returning staff to work quicker.
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas – the dynamic formula that drives business performance. Together, we unlock potential.