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Niche benefits emerge as key differentiators for organizations
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As organizations grapple with objectives, such as attracting, and retaining talent and balancing costs, a few niche benefits can help organizations differentiate themselves from their competitors.

Niche offerings, such as coverage for advanced medical and out-patient surgeries, are valued, and one of the factors that influence employees to remain in an organization. In India, changing lifestyles together with long work hours have led to the emergence of diseases, such as diabetes, hypertension, and coronary heart ailments. Medical inflation is also high. Given these, such benefits are appreciated by employees. If organizations want to develop competitive advantage through human resource (HR) processes, it is important for them to define, identify, and develop their strategic differentiating capabilities. Such a process, if followed, empowers the HR department to influence organizational strategy, and also provides a link between talent management and strategy.

Organizations in India, in tandem with other countries, are taking baby steps toward providing coverage that are more relevant to employees as well as offer benefits for their short-term needs. These trends are a step in the right direction, but most organizations have a long way to go in the path to provide comprehensive and useful health insurance and benefits to their employees.

The current HR trends

Marsh India’s 9th Annual Employee Health and Benefit survey showed that 31% of 2,029 organizations representing diverse industries, whose employees range from millennials to baby boomers, have adopted benefits for their women employees.  Also, 30% of the companies surveyed had provided coverage for advanced medical procedures in their health insurance benefits. 

About 42% of the organizations had implemented health and wellness or preventive care measures, such as yoga, to inculcate healthy living in their employees’ lives.

An interesting finding of the survey is that employees are pragmatic, and are willing to share the cost of such benefits. In addition, the majority of the employees appreciate the cost savings and the benefits of organization-provided health and related benefits. 

What organizations are doing to enhance benefits

To gain an advantage in the highly competitive talent market, respondent organizations have realized the need to differentiate themselves from their competitors. Most organizations are exploring plan enhancements that will allow them to provide value, especially for health insurance and disability benefits, to attract and retain their employees.

A few niche offerings currently offered by organizations

The three below bubble diagrams subheads are out of pocket medical expenses, children specific, and disability/rehab from left to right.

Source: Marsh India 9th Annual Employee Health & Benefit Survey

             Data is from 2,029 organizations surveyed     

Offering choice-based benefit plans

About 45 % of the respondent organizations said they are on track to offer choice-based plans to their employees, while the remaining 55 % of employers said they would like to introduce benefits that employees can choose to enroll in, depending on their circumstances and health issues.

Key benefit strategies implemented by organizations       

Women-specific Chronic conditions Medical advancements  

Workplace wellness programs

Organizations are also adopting workplace wellness programs.  About 42% of the organizations surveyed said they have introduced preventive health and wellness programs as a measure to maintain their cost budgets.

These programs are becoming popular among employees for two reasons: they improve the health and well-being of employees and the productivity of the organization. Also, they infuse the notion of health and wellbeing in the overall workplace culture.

As for organization, these  programs reduce organizations’ health care and associated costs.

Wellness programs lead to savings by lowering common risk factors found among employees. They educate employees about the preventive measures to delay or reduce the chances of developing lifestyle diseases, including obesity, diabetes, and heart disease. The reduction of health risks among employees leads to lower expected healthcare costs, pharmaceutical purchases, hospital visits, and absenteeism In addition to reducing healthcare expense claims, these also have a positive effect of helping raise overall productivity in organizations.

The study also found that more than 30% of the employee respondents are spending more than Rs. 5,000 of their own money per annum on popular wellness programs.

Most organizations are taking note of the benefits of  wellness programs, and more than 40% of the employers surveyed said they would be willing to offer health and wellness programs on a cost sharing basis.

Medical and disability benefits

Despite the progress, medical and disability benefits provided appear to be inadequate in India. About 53% of the respondents feel that medical insurance plans were inadequate, while 57% felt the same for disability insurance plans. Many employees end up depending on their personal finances to cover these kinds of expenses. The adequacy gap of insurance plans is increasing, which is leading to increased out of pocket expense for employees.

Organizations need to adopt a holistic view of employees risk exposure Organizations realize their employees are their greatest asset, and allocate a budget for employee costs, including recruitment, overtime, and insurable expenses, such as compensation, health, and safety. These costs ultimately affect organizations’ bottom lines.

There are also other costs associated with inadequate insurance and health benefits, which are often overlooked. These include costs that result from absenteeism and low productivity. If these costs are not managed effectively, they have the potential to affect employees’ wellbeing and also the organizations’ bottom line.

Such employee risks are too large to ignore. A holistic view of employee risks, without just factoring in short-term costs of insurance and benefit policies, is important to drive long-term profitability.

A stable, profitable organization cannot afford to ignore employee aspirations and well-being. Often, these important risks are not addressed in the traditional HR benefit strategies. A through study of the direct and indirect people costs allows organizations to understand the total costs-benefits ratio of employee benefit spends.

Trend in co-pay on claims (Pull out)  

Benefit Type

2010

2011

2012/13

2014/15

2016/17

Co-pay on claims

13%

33%

32%

34%

37%

Reference:Marsh India 9th Annual Employee Health and Benefit Survey and Report

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Marsh Contact
Suresh Babu, Senior Vice President, EH&B practice
Suresh.C.Babu@marsh.com