Private medical insurance has a significant impact in helping employers attract new recruits, the latest study by Personnel Today’s sister publication Employment Review has shown.
More than two-thirds (68%) of employers cited private medical insurance as a useful recruitment tool, and 63% said it improved employee motivation, according to the survey of 211 employers, with a combined workforce of 675,000 people.
Whole workforce schemes
Four in 10 companies now provide the whole workforce with employer-based private medical insurance schemes. And while the costs involved are significant – upwards of £1bn each year – it is growing in popularity among employers.
Employees’ perception of private healthcare as an attractive alternative medical system is also growing, despite massive amounts of money being thrown at the NHS in recent years.
Take absence, for example. More than 80% of employers believe their schemes helped staff return to work more quickly than if they had relied on NHS services.
Two-thirds said their schemes improved the performance of staff at work suffering from an illness, disease or injury.
The business case
Does private medical insurance pay for itself? Employers clearly believed that it brings benefits to the business, yet there was still concern about how the costs incurred from funding private medical insurance schemes could be fully justified.
Only one in 14 employers (7%) believes that it is fully cost-effective, ie, that it entirely pays for itself through such gains as improved absence management or easier recruitment.
And more than a quarter (28%) of employers consider that their insurance scheme does not pay for itself at all.
Private medical insurance costs £506 per person, per year according to employers, and at least three-quarters of schemes are entirely self-funded.
However, 61% of employers providing insurance imposed access limits to it, giving directors and senior managers preference over line managers and permanent employees.
For more information, go to www.xperthr.co.uk
Stat of the week: £506
The average cost of providing private medical isureance, per employee, per year.
Source: Employment Review