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Employers are currently presented with a rare opportunity to re-evaluate the value of the employee experience and the impact it has on overall business performance. There has been several recent studies carried out post pandemic that focus on the benefits of organisational wellbeing, but some employers are finding it hard to quantify the return on investment.
Australia is currently experiencing its greatest skills shortage on record. Australia's unemployment rate in mid-2022 was at near 50-year lows (3.5%) and under normal circumstances many commentators expected to see significant uplifts in employee compensation. However, this upward pressure is blunted by the rapid rise in inflation and the downstream impact on operating costs, particularly associated with supply chain challenges, increasing finance costs, the rising cost of energy and global market volatility. In this operating context, the typical options available to an organisation to attract and retain key talent become constrained.
As a consequence of this environment, we have seen organisations rationalise their compensation and benefits strategy to meet the market on compensation, expand pay for performance and at risk compensation options, and reallocate spending towards the employee benefits that matter to an individual versus the organisation. This last point is particularly critical to an organisation's ability to retain their workforce.
The global pandemic has shifted the focus from employee engagement to employee and organisational wellbeing. At the core of these initiatives are strategies to maximise Diversity, Equity and Inclusion (DEI) investment and to bring forward employee benefits that focus on the individual wellbeing from a psychological, emotional, financial and physical perspective. The changing nature of workforce demographics due in part to a broader DEI agenda, ageing workforces, increasing migration and organisational headwinds also require the organisation of tomorrow to consider how to deliver individually relevant and valued benefits. Ones that employees can select and access on demand in an environment where an individual's support needs may differ considerably.
In Australia, we continue to see an increased interest in benefit programs targeting wellbeing, including hybrid working benefits, additional paid leave benefits, mental health programs and support benefits, a broadening of parental leave benefits and professional and career development benefits. We are also observing an increase in the scope of financial wellbeing offered to employees as cost-of-living pressures increase both locally and across the globe. Benefits that target preventative health measures are also gaining momentum, including Employee Assistance Programs (EAP), annual vaccinations and mental health first aid. Of these, the provision of mental health first aid within an organisation is growing rapidly.
Gallagher's recent study highlighted that organisations who take effective action in this space and who respond to feedback from employee surveys, when conducted, have employees who report:
On aggregate, this naturally enhances productivity in the workplace.
Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient's industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers' control.
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