Over the last few years, our commitment to you, our business partners, has been to provide all the support we can so we can grow the Group Risk market together. We have invested in our advertising campaign, our training and Market Insights capabilities, alongside product development through innovative propositions like Sick Pay Insurance. But we have also spent a lot of time in better understanding the issues facing employers and what their employees value, so we can provide practical solutions that you can deliver to them. This means understanding the needs of the key employee benefit decision makers – HR professionals and Finance Directors.
We have been working with leading thinkers in these areas to understand the issues they face. We have heard from many of these decision makers that staff retention is becoming an increasingly critical issue for them. And we have heard from employees how companies that create a culture that cares for staff – that appreciates and nurtures talent, and makes employees feel valued – are better positioned to become an employer of choice, and have much greater success in holding onto their best people.
Our latest piece of research, in partnership with Oxford Economics, has helped to estimate the true cost of replacing staff and getting new employees up to speed. Many companies will be very aware of logistical costs, like advertising the position, recruitment agency costs and hiring temporary cover. But rarely measured is the cost of getting the new employee working to their full potential and how long this takes. Our research found that the average logistical costs for an employee earning £25,000 or more were just under £5,500, but the cost of getting that new employee up to speed was on just over £25,000, around 5 times higher. This means the total cost for recruiting and establishing a new member of staff is over £30,000 – a significant amount of money. The average time to get that new recruit working at their full potential was 28 weeks. This research highlights the importance of minimising staff turnover and retaining employees with the most valuable skills and experience.
But why am I mentioning this to you? Because we both know that one way to show you’re a caring company is by providing a comprehensive benefits package to your employees. Because we both know that providing employees with benefits that meet their needs, and support their physical and financial wellbeing is an essential part of a comprehensive benefits package. Group Risk products provide that financial support. Ensuring that the value of those benefits is properly explained to staff can give employers the edge when it comes to keeping their most important talent.
This research can help you to explain to your clients the true cost of replacing their employees. It can help you demonstrate to them that the value of Group Risk products goes beyond the management of absence costs. So they too can see the true value of having the right benefit plan in place to retain their most prized employees. And it can also help them to attract the best new talent when the need to recruit does arise.
These kinds of insights can help you to sell more, and to grow the Group Risk market. And we have already achieved some of it over the past two years, growing the number of businesses that now have a back-up plan. In 2013, you helped us to cover an additional 50,000 employees, giving them financial security for the future. This is just a small step forward; by working collaboratively we believe we can make this a significant leap.