Linking fees to reductions in employee absence can be a way to align adviser and employer interests, but there are challenges in benchmarking actual returns, according to advisers speaking at the Corporate Adviser Health & Wellbeing in the Workplace conference last month.
Delegates at the event, at the Thistle Marble Arch Hotel in London, heard that JLT Benefit Solutions was already in the early stages of an agreement with an employer where it will be remunerated on the basis of the employee attendance results it achieves.
Gary Smyllie, consultancy manager at JLT Benefit Solutions said his organisation has put in place a share of savings agreement with a client, whereby it shares savings made through improved employee engagement and productivity reflected in premiums on products.
Delegates said the approach was a positive one but pointed to potential problems with benchmarking success, as the choice of when to start benchmarking would always influence outcomes.
Demonstrating the value of health and wellbeing strategies was also complicated by the contrary effects of presenteeism and absenteeism on data.
Stressing that the arrangement was in its early stages, Smyllie said: “It is about taking a holistic approach and looking at the PMI claims and the early reporting on the GIP side and seeing what we have achieved for the clients. The money we get is through the savings on premiums if we can reduce their PMI and GIP costs.”
Neil Hope-Collins, a HSE inspector and member of Prospect said: “Reduction in presenteeism will lead to an increase in absenteeism initially, and then it should come down later. That is something that you advisers are going to have to deal with. Do you take your baseline before or after you have dealt with presenteeism problems?”
Paul Ashcroft, principal at Mercer said: “We have a technical tool for monitoring the success of absence, but the problem is you always see a spike on implementation. But once you have that out of the way, at least you can measure how absence is occuring.”