Harnessing Health Insurance
A Key Tool for Talent Attraction and Retention in New Zealand
The inability to attract and retain talent is a growing challenge worldwide, as employers increasingly struggle to find the skills they need.
In New Zealand, businesses are dealing with significant skills and labour shortages across all industries, with multiple factors creating a challenging market. The quest for attracting and retaining top-tier talent has become a primary objective for many organisations.
Whether it’s the rise of remote working, an increased focus on staff wellbeing or the expansion of the gig economy, businesses are facing mounting pressures from all sides. And they’re tackling this while trying to stand out from the crowd and attract the very best talent. As such, businesses need to rethink their talent acquisition and retention strategies.
Due to NZ’s current economic climate, many organisations are implementing employee benefits as a critical strategy to combat cost pressures. A recent Skynova survey highlights that a staggering 47% of employees across NZ have parted ways with their employers due to insufficient benefits. The reasons for leaving employment varied per generation, with 55% of millennials resigning due to insufficient benefits.
Health insurance was cited by 34% of employees as a key reason for their loyalty towards their current employer. Similarly, 32% of employers felt that health insurance could be a reason for employees to stay longer.
Why focus on Health Insurance?
The cost of private health insurance premiums can strain many household budgets. With cost-of-living pressures soaring, businesses providing health insurance can offer substantial financial well-being support to their employees, by subsidising (or partially subsiding) the premium and reducing, or sometimes eliminating, medical costs related to general practice, specialist care, allied health, and in-patient care.
Furthermore, the ongoing strain on the public health system has prolonged wait times for specialist treatments. As of April 2023, nearly 46%* of patients waited more than four months to receive specialist care. Timely intervention facilitates quicker recovery; hence, access to quality care via private health insurance is crucial.
Moreover, health insurance can promote prevention, early diagnosis, treatment, and effective management of health issues. This results in better outcomes for individuals and the workplace, reducing absenteeism, boosting productivity, and enhancing engagement.
Creating a sustainable health insurance program
While health insurance offers immense benefits, organisations must address cost pressures and ensure the sustainability of their programs. A constantly changing benefits program can confuse employees, decreasing engagement or satisfaction. Here are some considerations for crafting a sustainable health insurance benefits program:
1. Cost vs. value
Designing a sustainable benefits program requires careful alignment with your budget, company goals, and Employee Value Proposition (EVP). It's essential to ensure you are paying a fair price for your organisation's needs, avoiding unnecessary expenses on superfluous offerings. Tailor your health insurance program so that it directly reflects the requirements of your employees, thereby optimising the use of resources and enhancing the perceived value of your benefits program.
Health insurance serves as a valuable differentiator for your EVP at present. However, with the growing market demand, this benefit may eventually become a basic expectation rather than a unique selling point. Regular benchmarking will ensure that your program remains competitive and relevant, meeting employee's evolving needs and expectations.
3. Reviews and employee engagement
Engaging in ongoing, effective employee education and communication about the program's benefits is critical to ensure sustained value recognition. Encouraging regular utilisation of these benefits reinforces their value and enables your employees to proactively manage their health, promoting an overall healthier and more productive workforce. Regular reviews will ensure that your communication strategies are effective and that employees fully understand and appreciate the benefits.
Aon People Solutions
It is common practice for businesses to regularly assess and plan for various risks, such as liability insurance and overall business risk. However, it's equally important to have a solid strategy in place for managing people-related risks, and to frequently review and update that strategy as necessary. A well-crafted health insurance program can offer immense value and build resilience within your workforce.
Aon’s People Solutions help businesses protect the health of their people and their people’s families. Find out how we can support you to build an employee benefit solution that provides the foundation to long-term workforce resilience. Say hello to the Aon People Solutions team today.