The industry body for the group risk sector has hit out at suggestions that employers are looking to increase investment into benefits funding support directly to staff.
Over the next 12 months, nearly a third plan to increase their investment but almost the same number are looking to increase investment into funding support directly, which the industry body for the group risk sector believes is a concern.
But they are effectively “rolling the dice” when they fund support directly to cover financial, physical, mental or social support for staff, according to the Group Risk Development organisation, GriD.
This can lead to many, potentially unforeseen, issues, they say. There is no way of predicting how many employees will need support and for how long, or for which conditions, or how much it will cost, and it could also be an unintended p11d taxable benefit for employees. Employers who take this approach are therefore left unable to properly budget or offer consistency to staff.
And while employers are facing increased financial pressures this year, GRiD warns that they should not risk the health and wellbeing of staff, particularly when employee benefits offer much better value than self-funding, and usually come with a huge amount of support to mitigate absence and expedite returns to work.
It’s good to see that investment in employee benefits is being bolstered this year despite some challenging financial conditions for businesses
Their spokesperson Katharine Moxham said: “Employers should not be lulled into a false sense of security if they happen to have a healthier-than-usual workforce in any particular year. This model is not sustainable as at some point the reverse may well be true, and those employers who choose to fund support directly will need extremely deep pockets.”
Other areas where employers are increasing their activity include encouraging engagement and utilisation of the support that’s available, making it easier to access support and benefits such as via apps and online, communicating available support to staff, making support available to more of their workforce, extending support to include family .
Employers, they say, are often surprised to discover that Group Life Assurance typically costs as little as 0.5% of payroll, and Group Income Protection is often in the region of £300 per employee per year but can be as low as 0.25% of payroll, depending on how the policy is designed.
Not only does it give peace of mind to employees and employers that neither will face any unexpected costs in the event of staff illness, but it may also reduce the likelihood of them being absent in the first place.
Moxham added: “It’s good to see that investment in employee benefits is being bolstered this year despite some challenging financial conditions for businesses.
“Particularly pleasing is the continued investment to support more of the workforce which may include supporting families members as well, but employers need to take heed that helping staff by funding support on a case-by-case basis is speculative at best and a costly gamble at worst.”
