Stephen Hackett: Just how bright is the future for tech-based flex benefits?

stephen hackett

Tech-based health and wellbeing looks like the next big thing, but do employers have the appetite to spend money on it post Brexit asks Broadstone director of corporate services Stephen Hackett

Traditionally, employee benefits were provided to recruit and retain good-quality staff but were limited in both scope and ability to be tailored. They have since evolved in range and flexibility to give employees more say in their benefits package.

But changing demographics, potential further law changes and innovative products in the marketplace are making the EB market ripe for a revolution. So where next? And are employers ready for both radical change and the implied costs?

EB in the UK have centred on pension provision, followed by a form of group risk and then of healthcare cover. Research by CIPD shows that 60 per cent of employers offer group life and 43 per cent a PMI scheme for at least some staff. The advent of total reward statements has helped show employees the full value of their package and the introduction of flexible benefits has increased the level of choice, with 20 per cent of employers offering some form of flexible or voluntary benefit.

This mass shift towards flexible benefits was first seen in the US, where ‘cafeteria’-style benefits have existed since the late 1970s. EB trends often transfer across ‘the pond’ and can be a good indicator of future trends in the UK. Recent research in the US from the Society for Human Resource Management 2016 shows that organisations that had increased their benefit spend were most likely to do so on health – at 58 per cent – and wellness – at 45 per cent. Increased use of technology to access medical information and monitor fitness and health, the rise of telemedicine, and targeted employee communications are all current trends in the US.

In the UK, legislation on duty of care and equality has driven the number of benefits structured and used. In the past, duty of care focused on the physical health of employees, but this has expanded to include mental health. This has led employers to look at providing help for staff where possible, through EAPs or training key staff in mental health issues.

With the removal of the default retirement age in 2011, EB have been altered to allow older members to remain in schemes. The need to consider an ageing workforce and the benefits that may be attractive to them has become a key consideration for employers.

Providers have looked to develop existing products as well as introduce new ones to stimulate the market. Examples can be seen in the inclusion of added-value features, such as early intervention services and EAPs, for no extra cost. New products such as cancer-only cover, short-term disability cover and healthcare products focused on mental and musculoskeletal issues have also been launched.

So what next? With employers looking to increase engagement and maximise the value of benefits they provide, we have seen a rise in the use of flexible benefit platforms, which have not only helped employers communicate their benefits package but also given employees a degree of flexibility to tailor their benefits. Until now, access usually required an employee to log in via a PC or laptop. Today’s more tech-savvy users are looking more and more to mobile device apps and this should be taken into account when selecting a platform.

The rise of telemedicine has seen several providers launch online doctor consultations, such as VitalityHealth’s Vitality GP and Axa-PPP’s Doctor@Hand. With GPs under pressure and waiting times increasing, telemedicine could become the new star of group risk and healthcare offerings.

Technology in the form of sophisticated wearable health trackers – think Fitbit and Jawbone – arrived a few years ago and the number of devices and their popularity mean this trend looks set to last, something noted by some employers that offer discounted prices or even provide them for free. Aspects of wellbeing are built into many risk and healthcare products for no extra cost, such as EAPs and online health assessments, which means most employers are already involved in wellbeing even if they lack a formal plan.

The market is changing and employers and employees are increasingly seeking more flexibility. This may suggest a revolution in EB but do employers have either the budget or the desire, post Brexit, to leap headfirst into a new, technology-driven era of flexible benefits?