Corporate welfare represents a set of initiatives implemented by the employer with the aim of increasing welfare and social security of employees and, consequently, of their families. In this interview with Massimiliano Aloi, account executive in the employee benefits division of Strategica Group, we analyse the subject of corporate benefits and how they can bring real advantages to employees and the company.
During the pandemic, we have seen companies becoming more aware of their employees’ welfare and the social environment in which they operate. Corporate health programmes have been implemented – or expanded if already in place – safety measures have been increased (for example by offering molecular and rapid tests) and, in many cases, psychological support services have been offered.
We have always been focused on the culture of risk and, in this context, we have tried to focus on insurance coverage for risks that, in some way, can impact the family income. Unfortunately, Italians are underinsured compared to other European countries because we have little awareness of the possible economic consequences of an adverse event.
Assuming that most Italian families are single-income households, it is easy to understand that, in the event of death or disability of the only worker in the family, all economic income is lost, replaced only in part by the indirect pension from the State or from the social security institution to which the worker belongs. This does not compensate for the difference with the previously received family income and puts families in great difficulty.
In the pre-Covid era, market operators considered welfare as a simple method of increasing employee compensation without further burdening labour costs, and as a means of increasing attractiveness in the eyes of potential new employees.
The pandemic has changed this view and companies now find themselves changing their outlook. It is clear that the programmes set in place by public institutions in the welfare area are not enough, and consequently companies themselves must take responsibility. Sustainable growth will be the new ‘refrain’ of those companies that want to win the market challenge, positively impacting on the real economy and creating value for the ecosystem in which they operate.
As an insurance brokerage, we really focus on coverage products and solutions that support families in need of assistance. Having said that, the benefits that are most appreciated by employees, in addition to what is mandatory under the various collective bargaining agreements and company regulations, are obviously those where the frequency of claims is most important: first and foremost, healthcare expense reimbursement programmes, which many employees confuse as an indirect payment tool for any healthcare expenses.
Our job is to make both employers and employee organisations aware of real risks. As consultants, we have the duty to educate people about insurance culture, transmitting the importance of prevention. We also design, for high-level managers, innovative concierge programmes. This is a win-win balance, in which company and employee are mutually contributing to better conditions.
First, it is absolutely necessary to understand the needs of those who will benefit from it – the employees. It is not uncommon to come across companies that offer their workers pre-packaged solutions based on market practices or pre-established plans. There are even welfare solutions decided at national level between employers’ associations and trade unions, without taking into account objective and concrete situations. All of these may not have the hoped-for impact or may not be welcomed, since the central focus is not on the needs of the individual.
Each company and each person has their own peculiarities, their own needs and their own perceptions. For this reason, we are implementing a system that offers companies a picture of the real needs of its workers. In practice, we are starting to prepare an ad hoc created plan with each company, which meets the real needs of employees; this strategy, already proven, is certainly the most efficient, the one that offers the best employee experience, as well as an increase in the company’s reputation in the eyes of both their workers and the market.
Corporate welfare does not have a direct impact on company results, but contributes, in the medium and long term, to its achievements. Some studies show that companies with significant welfare plans have productivity and profitability indices that improve over the years, as well as a tendency to increase the number of employees and decrease staff turnover.
It can be assumed that, just as welfare has a positive effect on business results, it also has a positive effect on the company climate, employee satisfaction and, consequently, on productivity. Hence the need for personalisation: a plan perceived by employees as ‘useless’ can turn into a boomerang, generating dissatisfaction with company choices, with all the ‘cons’ that follow.
Regarding the companies that, for various reasons, do not offer adequate welfare, the same studies show that their productivity and profitability indexes improve slower and less than those companies that do invest in welfare. Those that do not do so are also considered less attractive, which is now more important than ever considering the emerging situation.
If the current trends of economic recovery are confirmed and become structural, the number of open positions on the job market will increase. Unemployed professionals will have more choice and, consequently, will favour those companies that, for the same salary, offer better welfare plans.
There are still companies today that do not sufficiently consider the weight and potential of corporate welfare. When I have discussions with these companies, I always suggest that they start by understanding what their employees’ needs are and, on this basis, start to move in a pragmatic way, with a basic plan that has a positive impact at first. I believe that a more accurate reading of the pros and cons in terms of business performance and productivity will drive more and more companies to invest in their employees’ needs.
I always like to recall the case of a company that asked us for advice in 2015 regarding its employee benefits plan, with a limited budget given the planned investments. The company had 139 employees and we had negotiated a simple occupational and extra-professional accident programme for them, effective the following year.
Over time, the company had significant growth thanks to the great work of managers and employees, as well as the employee benefits plan – we have added life, medical expense reimbursement, dread disease and IPM programmes. In just six years, the company has grown to 247 employees – an increase in the workforce of more than 70%. Certainly, the company’s management has been impeccable; however, the employee benefits plan has been the glue between the company and employees, making them feel part of the project.
Unfortunately, the pandemic situation has somewhat slowed down the plan for a further increase in welfare, but it has only been postponed: the managers are convinced that the benefits achieved through welfare are far greater than the investments made.
Certainly. Companies and their managers must become aware of the ever-increasing responsibility they have, not only towards their own people but also towards the ecosystem in which they operate. The goal is well known – creating a more sustainable working environment. This is the path also outlined by the directives of Italy’s National Recovery and Resilience Plan (PNRR), which represents an enormous opportunity for the revitalisation of Italian companies and our entire economic system.
The PNRR will increase attention on the topic of individual and family protection, for which employee benefits are a fundamental aspect. In a context strongly conditioned by the structural limits of our social security system, social responsibility will be crucial for companies that want to take full advantage of the opportunities offered by the PNRR and pursue a high ESG rating.
Do you need more information about Employee Benefit programs? Contact: Massimiliano Aloi m.aloi@strategicagroup.com +39 349 8857918
Article by Chiara Zaccariotto from Commercial Risk