How a robust employee wellbeing benefit strategy can help businesses to mitigate people risks

The shock of COVID-19 lockdowns and work from home orders, now exacerbated by a cost of living crisis, has driven fundamental shifts in the way employees feel about work – and how they feel at work.

Employees are now focused on wellbeing and the impact of work on their mental and physical health, a change in perspective that has helped to precipitate ‘The Great Resignation’. In fact, almost two-thirds (62%) of employees now cite wellbeing as a key deciding factor when applying for a new job, while only half feel their current employer prioritises their wellbeing.¹ 

These concerns are seemingly driven by very real health impacts. According to the Chartered Institute of Personnel and Development (CIPD), 50% of employees cite mental ill-health among their top three reasons for long-term absence, 48% point to musculoskeletal (MSK) injuries and 48% include stress in their top three.²

What’s more, employees are increasingly turning to their employers for help managing these issues – two-thirds actively sought help from their employer for mental, physical and wellbeing in 2021.³ Quite simply, employees now want and expect their employers to care about their wellbeing, and will stay with employers that meet those demands.³

Employers taking note

This changing work dynamic has not escaped the attention of employers, according to our UK Business Risk Report 2022, and many are seeking to take urgent action to address employees’ demands.

For instance, almost half (49%) of respondents pointed to employee mental health and wellbeing (EMH) as a key risk – up from 30% in 2021 – while health and safety was flagged by 33% of respondents. 

In a context where many businesses also highlighted concerns about talent management, acquisition, retention, and succession, it is no great surprise to see 32% focusing risk management investments on health and safety, mental wellbeing, and talent management risks - and 35% see these investments as a priority for the next 12 months.

The role of employee benefits in mitigating people risks

Curiously, however, employee benefits were a focus for only 12% of employers. This ignores the crucial role that employee benefits can play in addressing a whole range of people risks, including wellbeing risks.

As the CIPD points out, investing in the right people benefits can lead to increased resilience, better employee engagement, reduced absence, higher performance and enhanced productivity – all of which can, in turn, have positive impacts on business performance.²

Importantly, however, the CIPD also points out that benefits can no longer be seen as an ‘add-on’ standing separate from the wider business – rather they must be integral to a wider wellbeing culture with buy-in from leadership and actively communicated to employees.

In the context of changing employee attitudes, it is also important to understand the wellbeing benefits that employees value the most – and target spend in these areas to maximise returns in terms of both employee wellbeing and business outcomes.

Which wellbeing benefits do employees value the most?

We can again look to recent research to identify the wellbeing benefits that resonate with employees:

• 35% of employees say virtual mental health counselling is one of the most valuable benefits.
• 34% point to mental health insurance.
• 34% also say virtual support groups and mindfulness tools are among the most valuable.
• 32% value the provision of tools and training on how to help others with mental health issues at work.⁴

On top of that, benefits designed to enhance employee wellbeing should not ignore physical wellbeing – from gym memberships and cycle to work schemes to health insurance – or benefits targeting employees’ financial wellbeing, particularly as the UK battles a cost of living crisis.

One thing is clear, a cost of living crisis is only likely to sharpen employee’s focus on wellbeing. Those businesses able to offer well designed, coherent employee benefits schemes that their employees genuinely value and engage with, are likely to emerge stronger when the economic headwinds start to abate.

Help is at hand

For more information, read more about UK businesses’ focus on employee wellbeing in the UK Business Risk Report. Or for advice and guidance on building a targeted employee benefits strategy, speak to our colleagues in our sister company - Mercer Marsh Benefits.

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