In the latest of our webinar series with the Food and Drink Federation, Aon’s Richard Fawcett, Industry Leader, Food, Agribusiness & Beverage (FAB), Andrew Stemp, Associate Partner, Talent Advisory Practice and Niall Degan, Strategic Broking Lead, Health & Benefits, discussed the current state of health and benefits within the FAB industry and how organisations operating in these sectors can optimise their reward strategies.
What is impacting healthcare and risk markets?
The transformation of healthcare and risk markets in the recent post-COVID years has placed greater pressure on HR and people functions more broadly. An increasingly burdened NHS has seen waiting lists soar to an all-time high, driving the usage of private medical schemes. Some company Private Medical Insurance (PMI) schemes have witnessed a 50% increase in utilisation, mostly driven by smaller claims, and a substantial rise in referrals from digital GP services following the pandemic. With cancer diagnoses rising amid a lack of proactive diagnoses and missed NHS targets, more complex care has been required through these schemes. Chronic illnesses are contributing to this trend: it is estimated that 1 in 5 people in the UK will have a major condition such as cancer or dementia by 2040. These challenges have resulted in cautious pricing from insurers, with Aon Broking Insights revealing average increases of approximately 32% on PMI schemes in 2024.
Aon’s Health Risk Forecaster
Understanding the factors that affect employee health gives a great opportunity to mitigate risk and potentially spend. Our Health Risk Forecaster tool pulls together data from a client’s benefits scheme, absences, health data and premium trends to give an overview of how spend is expected to change in the future.
Through understanding the risk profile and how resulting premiums are likely to evolve over the next few years, clients can then budget accordingly or, better still, take steps to mitigate those risks.
Aon’s Risk Forecaster analyses and quantifies health data and premium trends, then benchmarks performance and projects future premium spends. With this information, it is possible to model alternative scenarios and recommend strategies that deliver return on investment (ROI) projection. In turn, it also increases the likelihood of better employee engagement and supports governance processes.
Key considerations for a successful total reward policy and Value Proposition
Employee expectations surrounding their total reward offering have steadily risen particularly since the pandemic, as organisations continue to compete in attracting, engaging and retaining top talent. Increasing leave benefits such as paternity leave, an increased focus on wellbeing and lifestyle-related benefits, hybrid working patterns and access to virtual GPs are just a few examples of an expanding set of benefits for employees. However, as employees come to expect greater choice of rewards against the backdrop of rising costs for employers in many areas, how can organisations secure the best return on their reward investments?
Before reward optimisation can take place, four fundamental questions must be considered:
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Do you know what your total reward spend is?
Companies need to gain a clear understanding of their total rewards spend with a full clarity as to what that spend includes and what is spent where.
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Do you know how effective your reward investments are? How are they measured?
High reward effectiveness means every penny spent returns more real and perceived value to the organisation and its employees than what’s spent
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Where can you generate greater value without necessarily spending more?
The most effective changes consider employee preferences, particularly for critical talent for now and the future, including target recruits.
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Does your critical talent value their rewards or have their needs changed?*
Employees have had time and reason to reflect on what matters to them – for some, priorities have changed in light of recent events and the move to flexible working.
*When asked, 70% of webinar attendees said that they had not asked their employees about their reward package and what they value most, or what they’d want or be willing to lose.
How does Total Reward Optimisation benefit an organisation?
Aon’s Total Reward Optimisation addresses the different needs of business leaders and employees by making a clear link between employee reward choices, cost and the impact on engagement or ROI. An adaptive employee survey is utilised to gain insight into individual choices, measuring the extent to which employees value their rewards package, while identifying opportunities to tailor rewards to those which are most sought after or most highly valued by different demographics. Breaking down employee cohorts by key criteria such as role level, age, tenure, business area or employee performance, new programme designs can be tested so that future rewards decisions are substantiated by hard data, taking the guesswork out of future reward strategy and the tendency to “do what everybody else does”. By identifying opportunities for trade-offs and redesign of rewards alongside the ROI of these changes, conjecture is replaced by evidence-based rewards discussions.
Watch the full webinar here
For further questions, please contact Richard Fawcett
These are the views of Aon. They do not necessarily reflect the views of The Food & Drink Federation.
While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.
This article has been compiled using information available to us up to 2025. Aon UK Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales. Registered number: 00210725. Registered Office: The Aon Centre, The Leadenhall Building, 122 Leadenhall Street, London EC3V 4AN. Tel: 020 7623 5500
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