As an SME owner, you manage a group of people who you rely on to help your business reach its targets. Just like you, your people have families to support and costs to cover.

So what happens when they can’t work for a while, due to illness or an injury? Do you want to be the employer who buries their head in the sand when it comes to a health catastrophe, or do you want to be mindful and conscious of the impact on that person and their family’s economic stability?

I’m hoping the latter. In which case, you’ll want to ensure your employee is prepared in the event of them becoming incapacitated. One of the first things you should be thinking about when providing catastrophe cover for your people and their families, is extended sick pay cover. This is a risk solution for both you and your people. It will supply continuing income for a person who is off work for a prolonged period, without you having to self-insure and bear short, medium and potentially long term costs.

The first step is thinking clearly about the risk and establishing an objective sense of its impact on you and your business. Being off sick for four weeks or more in a year is a 1 in 32 risk (Association of British Insurers). Higher than one might expect.   Only 2 million (Swiss Re Group Watch) of a 31 million workforce in the UK (ONS) have cover in place, demonstrating a massive gap between the need and what is actually being covered.

Full extended sick pay cover costs between 1 per cent and 2 per cent of total gross payroll a year. This form of protection can be expensive for a small business looking to keep costs down.  However, that doesn’t mean providing some kind of catastrophe cover is out of your reach. You should also be thinking about critical illness insurance – an employee benefit that pays out a lump sum direct to the employee in the event of a person having an illness such as a cancer, heart attack, or stroke.

The reality is that things are changing really fast. Cancer is now what most of us will die from, with 2.5 million people in the UK currently living with cancer (Macmillan) and the number of people dying from heart attack in their middle years falling. It is great news that people are now surviving cancer for many more years. People are now living with cancer, on average, for 10 years, compared to just one year in the 1970s (Macmillan)

Do improving survival rates mean that a diagnosis of cancer is not a catastrophe?

You have to bear in mind that survival rates improve as a result of rapid developments of new diagnostic methods and treatments. Bringing it down to an individual level, those new methods may have a big impact on your employee if they require intensive courses of treatment after being diagnosed. A lot of people will work through it, but they may not be able to work full time for an extended period. And that’s the beauty of critical illness cover – it’s a like a catastrophe bridge for families.

It provides a financial cushion that means a person living with a debilitating illness can work a bit less, or their partner can change their own working pattern to support them. Having a lump sum to draw from, can help pay off a mortgage or pay for treatment unavailable under the NHS or private medical insurance. Just because conditions such as cancer and heart attacks don’t always kill you anymore, doesn’t mean they’re not catastrophic to people and their families, with the potential to wreak havoc in the family finances.

Critical illness paid for by you, with the ability for an employee to buy a top-up, is a really underused benefit – one that is flexible and good value. Many employers think this is out of reach, they’re too small a company, can’t afford it or have no real sense of the cost versus value. To put it into perspective, providing critical illness for a group of 10 employees with a £50,000 lump sum benefit, you would be looking at paying between £1,000 and £1,500 per annum.

Right now government is making us all set up an employee benefits scheme whether we want it or not. That is Auto Enrolment to a Workplace Pension. I expect you have heard about it. When you’re through doing what you have to do because the law has changed, ask your financial adviser to model the costs of a comprehensive benefits package, including life, extended sick pay cover and critical illness cover, you might be quite surprised about how much you can get for your people for a modest outlay.

Thinking about the big stuff in life is challenging and you inevitably start thinking about what type of employer you are. When an employee is at home and unwell, do you want to be sat in your office worrying about the fact you haven’t given them the option to secure themselves, or would you prefer to be able to send them a guilt free bunch of flowers and a get well card, knowing there has been a payment from the catastrophe cover policy?

Read more:
Protecting your people when they have a health crisis – 1 in 32 in a year is not a remote risk

While it is good to see that mental health in the workplace is being discussed regularly on social media and in the news, we will know it is being recognised appropriately when it’s being discussed on the same basis as physical injury. For example, we will know we are dealing with the issue of mental health in a balanced way when we’re discussing it with employees on the same basis as a back injury or broken leg. Of course mental health is more complicated than a broken leg, there are no quick fixes, but the good news is that support is available.

According to ‘Well at Work’, an initiative run by the Hammersmith and Fulham branch of mental health charity Mind, 1 in 6 employees are experiencing stress, anxiety or depression at any given time.    So it is all around us and while our default is to say some stress is a good thing, employers of all sizes need to be prepared to provide support to those who need it when the stress tips over into something acute and incapacitating.

‘Well at Work’ report that poor mental health costs UK businesses £1,035 per employee each year in lost productivity. This highlights how important it is to care about employee wellbeing. Keeping your people well at work is good for them and your trade.

As a sick pay insurer whose model is based on getting a Case Manager to the absent colleague early enough to make a difference, we see first-hand how the benefits of early intervention and employer awareness can help SMEs support workmates living with a mental illness.

The stigma is real and it’s part of the problem

Fundamentally poor mental health is a serious illness like any other illness. Yet a lack of awareness from employers as to its seriousness and how it should be addressed can result in a situation where the person is left to cope on their own.

With 1 in 4 people in the UK suffering from a mental health issue every year (Mental Health Foundation), one wonders why talking about it is still such a problem. But it is.

In our work as an insurer we see situations from an objective standpoint where it is clear to us what should be done. But these situations are very difficult for the employer particularly if the individual’s colleagues are not inclined to start from a generous place.

One of our policyholders had an employee who was diagnosed with Bipolar Disorder and there was a disturbing incident in the office. He had been off work for 5 months before we were notified of their absence, which made the task of returning the member to work all the more difficult. It was quite clear to us the employer did not know how to handle the situation.

As well as supporting the individual, an education and advice programme was provided to the employer and a graduated return to work was agreed. Despite this, the employer made frequent excuses to delay the person’s return, making it obvious that they didn’t really want them to return to work. The employer cited opposition from the individual’s colleagues as a factor.

First point to make is that this is disability discrimination and the employer opened themselves up to a higher level of damages in any unfair dismissal action. Evidently managers just aren’t comfortable with dealing with mental health absences. So, how can we change this?

Employer awareness, early intervention and lots of talking is essential

Where there is good employer awareness of mental health combined with early intervention, employees are able to overcome unforeseen life events and stay mentally well.

Early intervention was key in a case where an industrial accident resulted in a catastrophic fatality. A nearby workmate was unfortunate to witness the tragic death of his colleague and it’s no surprise that this seriously impacted upon his mental health. He required immediate Cognitive Behavioural Therapy.

Thanks to the employer’s awareness of mental health and the support procedures they had available, after only four weeks away from the workplace, he embarked on an 8 week graduated return to work. By eight weeks, he was back on full duties and after 12 months, he was doing really well.

Further to the support provided to the individual, the employer implemented on site drop-in counselling sessions. This received a 50% uptake from the employer’s people and gave them a virtual tool box of information that they would be able to go away and access if they needed to.

This just goes to show how early intervention, utilising the correct expert help and company preparation can prepare an employer to act quickly and look after their people’s mental well-being.

You need to be prepared

The first step is to be familiar with good resources who can provide support for people living with mental health issues. You’ll want to develop a virtual tool box of support and information that you can sign post a member of your team to. Some great organisations include Mind who are a mental health charity, Campaign Against Living Miserably who are a prevention of male suicide charity and Samaritans, who will provide confidential support over the phone.

It would also be wise to consider embarking you and your employees on a Mental Health First Aid course provided by MHFA that will teach you how to identity, understand and help a person who may be developing a mental health issue.

External emotional support, such as telephone and face to face counselling, should be made widely available to your people and they should be reminded regularly how and where they can access the service. At Ellipse we provide a workplace support service called Support Matters which is an integral part of our sick pay insurance product, Sick Pay Complete. Support Matters makes counselling services and advice across a variety of topics easily accessible to employees in the workplace.

Once your people are thoroughly engaged in workplace mental well-being, another option would be to implement a buddy system. This is where an employee living with a mental illness is paired with a colleague and if that workmate notices any relevant symptoms they follow a framework to provide the appropriate help and support.

The results of tackling mental health head on ultimately mean that your people will be well at work surrounded by understanding colleagues, your productivity levels will be maintained and you’ll be leaps ahead in reducing the stigma around mental health in the workplace.

As a business leader, it’s up to you to step up to the mark and look after your people. Once you’re prepared you’ll set an example by being the person who never avoids talking about mental health generally or with one of your people who needs your support.

Read more:
Time to address the stigma and do the right thing when a colleague is mentally ill

Working in the employee benefits industry and managing a small business that employs 40 staff, provides me with a bird’s eye view of the latest trends in workplace health and wellbeing as both provider and consumer. The industry I work in is changing dramatically and until recently was almost exclusively serving compensation and benefits specialists working in large UK and multinational companies as these were the only firms with the resources to implement such programmes.

Fortunately, that was then and then is now and the employee benefits landscape now offers many more opportunities for SMEs.

Ordinary people are underinsured

When it comes to financial protection and healthcare support, the reality is that ordinary people are often the ones who are least prepared.

Low and middle income families tend to rely on state provision. And we know that is being scaled back to balance the government’s books. But in any case many recipients of state provision soon realise that what is provided is simply inadequate, particularly when it comes to death and disability benefits.

Financial protection for these families is generally pushed into the ‘can’t afford it’ or ‘don’t know why I need it’ box, yet the reality is that a young family will struggle to maintain their standard of living in the event that one of the main earners suffers from a long-term illness or injury, for example.

Lack of education is a clear contributing factor here. There just isn’t a mechanism to inform and educate on a large enough scale, to be cheap and easy for everyone to access. Money Advice Service gives a steer but is not a fulfilment mechanism. Tailored financial advice from an appropriate professional is generally only sought by those with significant wealth to manage, and protection of those assets in the event of death and disability then follows as a logic outcome of that wealth management advice.

This seems to be a worrying shortfall in important, sensible guidance for the people who need it most.

The workplace has a role to play

The workplace has a really important role in changing this and there are three key trends that are prompting a shift.

Firstly, as companies strive for productivity gains that will help them remain competitive, the health and wellbeing of their workforce begins to receive more attention. This is with regard to attracting and retaining talent in the business, and also in reducing time lost due to sickness absence. In short, when your people are your main asset it makes good business sense to invest in their wellbeing.

Secondly, auto-enrolment to workplace pensions is prompting employers to provide workplace benefits for the very first time. That’s a culture shift too for employees who suddenly see their employer as providing more than just employment. This means there are new employee benefit schemes being set up that can be expanded to provide life and extended sick pay cover.

And finally, technology is making it easier to communicate, compare and purchase products online and at a significantly reduced cost, both at a product level and for the implementers of such platforms, which is now filtering down to employer sponsored systems.

Trust in financial products is an issue that needs to be addressed head on. Payment protection insurance continues to cast a deep shadow. The employer’s endorsement after taking independent advice can have an important role to play in regaining some of that trust.

Shifting the employer from sponsor to facilitator

Rather than acting as a sponsor of benefits to staff, employers are now increasingly becoming facilitators, providing access to value for employees. The most likely scenario is the employer paying for the foundations and showing employees what they need to do to top up their cover to get a decent fit to their needs.

There are now a number of online tools available that allow employers to provide their people with access to recommended products at reduced group prices, as well as support and education that puts health and financial wellbeing firmly onto an employee’s agenda. The employer can then become the access point to a range of appropriate resources, importantly without taking the cost burden of providing a set level of benefit to employees. Of course the flexibility of this works well for employees too as within the workforce, there will be people at different life stages and with different needs and priorities.

Auto-enrolment is already compelling SMEs to introduce workplace benefits for the first time. SME owners and managers should keep an open mind about the world of employee benefits and explore the simple, cost effective options that are out there and which can provide great value to their people and the business.

Read more:
Creating a hub for employee health and financial wellbeing in your workplace

If you can’t answer the two questions in this headline at any time and with data, you do not have absence and illness risks under control in your business. Tough I know but in our life and disability insurance trade we see evidence everyday that a large proportion of big businesses can’t provide a list of their people who are severely or terminally ill.  That is a clear symptom of not having a reliable process for absence management.

 Employee absence, whether a result of illness or injury, can have a destabilising impact on any business and when absence is long-term it can have serious repercussions on your business margins.

Getting to grips with handling long-term absence is a challenge for most SMEs. Although rehabilitation and long-term support is available for some via an occupational health provider or an insurance company, when absence is infrequent it is easy to forget the support systems that are there to help you. It can be a challenge to ensure that line managers have the skills and confidence to actively manage absence in the workplace.

In my experience, the provision of manager training and support to deal with absence is quite often lacking amongst SMEs especially. This is understandable due to the infrequency of such events in reality and the lack of a dedicated HR resource in many cases. However there are simple steps that even the smallest companies can do to positively impact on the wellbeing of their staff and their business’ productivity.

Absence management is all about the data

Effective absence management depends on the accurate recording of an employee’s planned and unplanned absences. Often absence recording can be patchy, with inconsistent reporting standards and variable levels of data collection and analysis. The result is that many employers simply don’t know why their people are not in the workplace or, if they’re sick, how they are.

When discussing workplace absence with other employers, I often hear that employee absence “isn’t a problem in my company”, or “no-one takes any time off”. Chances are they probably do, but it isn’t being recorded or monitored. Or rather, it’s not been identified as a major business issue. Yet!

Just like many other business decisions you make every day, when looking for guidance the first place to look is at the data.

As a company with 40 employees, Ellipse has recently introduced an online tool to help manage our people and we’ve found it very useful. Employees are required to login and book holiday or planned absences, with notifications sent to their manager for approval. Similarly managers can log sickness absence for any staff members against pre-defined conditions and record return to work forms all online once the employee has returned.

This is a simple tool – managing absence data doesn’t need to be overly complicated – and it gives us an accurate view of where our people are and how they are. It also means our managers don’t need to think about the process.  They just do it and it quickly becomes second nature.

With a more stable process in place, we are able to identify absence patterns and put action plans in place where needed. Whether it’s a referral to rehabilitation services or a meeting with the employee to discuss repeat patterns of absence, all of this is only possible with consistent data collection, recording and reporting.

Don’t neglect the people side of absence

With the value of absence data hopefully becoming clearer, it’s important to put equal emphasis on how you engage with your people.

There are many sensitive issues in the workplace that managers must tackle and many of them will be outside the line manager’s comfort zone.  Organisations that can call on a dedicated HR resource to help have an enviable advantage, but those who don’t can still take comfort from the support available from other sources.

Employee Assistance Programmes, as they are generically styled, provide a support service for employees as well as a source of practical advice for managers. Advice on any issue affecting an employee’s attendance or performance in the workplace is available online and over the telephone and can help get to the root cause of any issue, minimising its impact on the employee and their employer.

While all businesses should make preparations for potential long-term employee sickness, often the most practical way to manage absence is to set up your internal processes and support infrastructure so they become embedded within the day-to-day processes and culture of your organisation.  The heart of the matter is to be talking to the employee early enough to make a difference and to reduce the risk of a short term absence being the start of a longer term or complex absence.

Read more:
Where are my people and how are they?

Customer service is a competitive issue for all companies. This sounds like an obvious point, but quite often firms don’t stray far from the established norms of their industry. Looking further afield for inspiration and breaking the mould might seem like a brave step, but it can bring great reward.

I set up Ellipse in 2009 to bring a new way of working and to challenge the traditional way insurers covered death and disability benefits offered by companies to their employees. I believed that sector was providing poor service, primarily through chronic under-investment in technology. So right from the outset we’ve looked to change that, by introducing online services to make it easier and cheaper for employers to work with us.

We broke the norms of our industry then and now we’ve decided to do it again.

From a customer’s perspective the financial services industry, which is still reeling from the banking crisis and PPI scandal amongst others, can seem very murky and opaque indeed. So to combat this, Ellipse has decided to take a more open and transparent approach and publish our Key Service Indicators (KSIs).

The KSIs are statistical benchmarks that track our service performance in key areas, namely, delivering quotes, issuing policy schedules, completing individual medical assessments and paying claims. We are the first insurer in our market to do this and we will be publishing updated figures every quarter.

To many in our industry this is likely to be seen as an unconventional strategy. We are committing to publish our service performance every quarter, regardless of how good it is and we are under no competitive pressure, or obligation to do so.

But is sticking to the industry norm really good for our customers? If you are confident in your ability to provide great service, why not share your data and be accountable for it?

We are confident in ourselves and we are confident that our customers – financial advisers and employers in our world – value a commitment to customer service which is evidenced by cold, hard data. Of course, being first to introduce such measures reflects well on our brand, which combine to give us the makings of a real competitive edge.

Indeed, talking about providing great service is one thing, but providing evidence is entirely another. If you are really good at the former, the latter shouldn’t be a problem.

So how can you be confident that you are providing great service? Here are some strategies that you may find useful:

1. Measure it. Identify the processes that are important to customers, make any improvements necessary to the design of the process, then record your performance against key benchmarks which matter to your customers.

2. Engage with your customers at every opportunity. Communication is vital because your customers want to feel valued and respected. They are also looking for peace of mind, so that they can trust you will deliver what you promise.

3. Ask for regular customer feedback. Surveys enable you to get an honest assessment of your business from the people that matter. We run a biannual survey in June and November every year, which allows financial advisers to score against key measures and gives an opportunity for open comments. Surveys are a great opportunity to learn and fix any problems or issues that have been highlighted.

4. Invest in great people. Ultimately, good customer service is driven by the people who are delivering it. To that effect we place a great deal of emphasis on hiring the right people. We have our core values – treating people as people and using clear and open language to name just two – and we make sure everyone we hire can demonstrate a commitment to those values. We also continually develop their skills and competencies over time.

5. View complaints as an opportunity to learn. We don’t get that many, but I always handle each complaint personally, as it gives me a great opportunity to understand what went wrong, why and what we need to do to fix it. In the words of Bill Gates, “Your most unhappy customers are your greatest source of learning.”

So in summary, there are two key implications for you.

Firstly, if great customer service is central to your value proposition and you think you’re good at it, then break the ‘rules’, be open with your data and accountable for it.

Secondly, if you’re not focusing on customer service and are relying on industry norms, be very aware that others will be. Some of these suggested strategies may be useful to you if you wish to address that.

Read more:
Stand up for service

My company Ellipse is a small team of 40 staff, so we’re much like an SME, but being part of a multi-national insurer we share a more corporate atmosphere too. That provides me with two different perspectives on internal communications. For larger companies this is an area which requires a coherent strategy and dedicated resource, with staff from many different backgrounds, located around the world, this isn’t surprising and is indeed essential for success. But for many SMEs, who are busy working hard and growing their businesses, this often isn’t a major concern. But should it be?

Effective internal communication helps ensure that all members of the organisation are working collaboratively towards a common goal. It develops a cohesive culture and empowers employees to make the right decisions in line with the organisation’s goals. This in turn leads to greater efficiency and productivity and improves customer service. These outputs are relevant to every organisation, so size really shouldn’t matter in this respect.

But SMEs shouldn’t assume that good internal communications is a natural product of a small team. Often communicating and sharing information with colleagues is overlooked as everyone concentrates on getting work done and it’s often the more subtle messages that get missed. That is the inevitable consequence of success and it’s the reality especially at start up stage. Good internal communications is not just about major company announcements, it’s an ongoing, open dialogue between all those that need to know. As the business grows, you need to think about greater process discipline, but also the communications strategy and structure which binds your team together. Both of those are essential for long term business success.

So although I’m not suggesting SMEs need to over-engineer their approach in this area, there are some simple steps which can make a real difference.

Firstly, review where you are now and where you’d like to be. It is quite interesting undertaking this review from a top down and also a bottom up approach. We setup a working group of junior staff from across the business to look at this first in a workshop format. They looked at a wide variety of aspects, from company policy announcements and business updates through to transferring calls and emails from customers onto other departments. Their observations and recommendations were then combined with a senior management view, which gives a much broader perspective of macro and micro issues.

You can then start to address any weaknesses and although your solutions will be very specific to your own circumstances, here are examples of some effective tools we use:

• Establish a set of Communication Principles and link them to your brand guidelines. This provides a guidance framework for employees which they can refer back to. Including performance against these principles in personal objectives can help too.
• Make sure every business process change has a Communications Plan.
• Store useful information in a central place e.g. intranet or even a simple SharePoint site.
• Open door policy – everyone in the business should be easily approachable and encouraged to listen as much as they talk.
• Monthly staff survey – listen to your staff. We use this survey to measure job satisfaction and give staff an opportunity to raise issues. Comments can be marked as private, but are otherwise shared with the group.
• Whole company monthly meeting – Individual departments provide updates, I comment on the overall strategic plan and we talk about the results of the staff survey. It’s a big time commitment, but works well providing the content is high quality and session is concise.
• 10 minute Stand Up – conducted weekly, except when we’re holding a monthly meeting. A brief meeting with the whole company, providing just key updates, is effective in reinforcing values, purpose and targets.
• Encourage good email discipline and watch out for poor practice – we find that if we are on our third email on the same topic, it’s time to talk face to face.
• Yammer – an enterprise social media tool which is a bit like an online discussion forum. All staff have access to Yammer and are encouraged to post relevant updates, so everyone knows what’s happening in the business.
• Careful use of All Company emails – use it sparingly and alongside your other channels. Too many, and messages won’t get read, too few, can make a small thing seem like a big issue.

Just like you multi-channel your customer communications, do the same here and in much the same way, you’ll get better results.

Keeping the momentum and focus on this issue throughout the business can be challenging, but implementing some of these ideas, with senior management support, can be very effective.

Finally, achieving excellence in communications requires continual improvement, even those who are further developed than others, will always be looking for better ways to communicate.

Internal communications is not just an issue for large organisations. SMEs should be mindful of the benefits of good communication and should not be complacent in assuming that this is naturally part of the furniture. Small companies don’t automatically benefit from good communications, you need to develop routines and working guidelines which you commit to.

Read more:
The importance of internal communications

Before you consider the fundamentals of what goes into your brand, I would draw your attention to the old saying “Your brand is not what you say about yourself, but what other people say about you.” The test of your brand authenticity is what your customers, competitors and own people are saying about you. If there is a gap between the two, you have a real business problem on your hands.

When setting up a business, one of the most important things to consider is your brand. Getting your brand right matters, it’s one of the most valuable attributes your company has. It should sit at the core of everything you do. A brand goes much further than what your logo and sales material will look like, it creates your image as a company and generates feelings from your target customers. Therefore, the question you need to ask yourself is – what is the personality of my business and how do I want it to be perceived? What feeling do I want my brand to generate when my customers see the logo or hear its name?

When I was formalising my brand guidelines, first and foremost, I set out what the business is about – why it exists. My own company, Ellipse, was designed to bring a new way of working and to challenge the traditional way insurers covered death and disability benefits offered by companies to their employees. I believed that sector of the insurance market was providing poor service through chronic under-investment in technology.

So, I went through the various components that make up a brand and at each point I wrote down what I wanted Ellipse to do and how I wanted the brand to be perceived. Every step of the way we kept the ‘why’ in mind and all elements of the brand grew from and around that ‘why’.

What is the core philosophy that sits at the heart of the brand?

• We are here to challenge the status quo.’
• ‘We will transform the group risk insurance market by stealth. We do it quietly, confidently and consistently.’

Your equivalent statements will probably be very different because your business is very different, but you should be able to boil it down to its essence within a few simple sentences that you, your colleagues and your customers will immediately associate with it.

Our principles
My next step was to create a list of the characteristics I wanted everyone who worked at Ellipse to share. These should explain how you act day to day. They define your culture and the overall personality of the business. Ours was to become and remain consistent. We included ‘We make it possible for employers and employees to feel protected’ and ‘We treat people how we’d like to be treated’.

Logo
A logo is the foundation of a brand. You need to create something different and instantly recognisable. We created something ownable and professional, but also distinctive in our industry. As with all elements of a brand, you need to set clear guidelines on how your logo is used.

Typography
Typography creates personality and sets you apart from your competitors. Flexibility and consistency are two further important considerations. As with all other elements in our brand ours established difference and communicated clearly.

Colours
Colour plays a fairly substantial role in purchases and branding and can influence how the brand is perceived. Our industry wasn’t known for its stunning colour palettes. We carefully considered, as you should, who our audience was and created a dynamic and stand out colour palette. We purposefully went for bold and bright colours to express that our processes would be different.

Tone of voice
A company’s tone of voice will inform all of its written copy, including its website, social media messages and emails. It’s an expression of people behind the brand. It must be distinctive and unique. It also builds trust. We wanted our words to back up our actions, how we speak to people builds credibility. The foundation of our tone is the voice of our personality which has – no jargon, no padding and is relevant and empathetic.

It’s likely that you have already considered these different elements – they are integral to why anyone creates a business in the first place. It is much more valuable to have them in a formal brand guideline document. As well as giving you the opportunity to remind yourself of what your business is about, it will help any future employees and colleagues to understand too. It should also contain guidelines on how to use the various elements of the brand.

Whatever you want your brand to represent, whether it succeeds or not will ultimately be decided by your customers. It’s the customers’ perceptions that count. Setting your brand principles and truly living by them will give you the greatest chance of success – your customers perceiving you as you would like them to. A brand may be intangible and its value hard to measure, but it does have a value and is vitally important to every business.

Since 2009, when Ellipse was established to challenge the status quo and bring to the market a new and different way of doing business, we have moved from a challenger to a more established player. We have become recognised as the digital group risk insurer.

Nearly six years later we constantly check on what our customer, competitors and own people are saying about the Ellipse brand. We ask ourselves is there a gap, and if there is, what will we do about it.

Image: Brand via Shutterstock

Read more:
How to build a brand

In his latest article, John Ritchie, CEO of Ellipse, reflects on how an overhaul of the state’s sickness benefits could actually be a blessing for his business.

Ensuring processes and support are in place to ensure employees who are absent because of sickness or injury are quickly rehabilitated back to the workplace.

• Each year, one million people are unable to work for four weeks or more due to serious illness or injury. Given a total workforce of around 32 million, this equates to a risk that will materialise for one in every 32 people.

• Each year, illness will lead to a quarter of a million people permanently dropping out of the workforce.

These sobering statistics were quoted in a recent research report from the Association of British Insurers (ABI), ‘Welfare Reform for the 21^st Century’. The report echoed my October column, speculating that having seen pensions for all being brought about through auto-enrolment it will not be too long before government looks to repeat the trick with long-term sick pay.

The idea of your business taking over the state’s role as benefits provider will not, I suspect, sound very appealing, but the ABI report highlighted that a radical overhaul of sickness benefits could work just as much to employers’ advantage as it would for the state and employees.

This is because employers can cover the costs of long-term sick pay through income protection insurance. Although this insurance started out years ago to do the purely financial job of covering a sick employee’s pay, it has evolved to offer much more. Like many other forms of insurance, the requirement to pay claims focused the minds of insurers on how the number and value of claims might be reduced. The result is that insurers have augmented their income protection policies to deliver a wide range of services designed to help employees back to work – a key difference in the approaches taken by state and private benefit providers.

Insurers gain because the impact of absence on their businesses is reduced. As the head of a small business myself, I am acutely aware of how disruptive and expensive absence can be. Short-term absences can generally be covered by other staff, but once an absence starts extending to weeks and months it becomes much more difficult.

Having insurance in the form of group income protection means my business has modest amounts in the shape of the premiums to find each year rather than the unknown and potentially much larger costs of continuing a sick employee’s pay. But there’s an added bonus in the shape of the rehabilitation services we can access. Finding people with the right skill-set who are happy to fill in on a temporary basis is difficult. What I really want is for my absent employee to get better and return to work, so anything that helps that happen is a real boon.

Obviously, some causes of absence will not be susceptible to rehabilitation techniques, but many are. Data shows that two of the commonest causes of long-term sickness absence are mental illness and what are termed ‘musculo-skeletal’ problems – back aches, whiplash and the like. In both cases, the NHS often struggles to provide resources adequate to the problem. It takes more sessions of counselling, cognitive-based therapies, physiotherapy and the like to get someone back to fully fit than the NHS is often capable of funding. Even though it could well save the NHS money in the long run, the pressure is ever on to control this year’s spending. For insurers, though, if they can get someone back to work, their claims costs will be reduced hence they are happy to fund such services.

When it came to pensions, after various attempts to persuade people they needed to put money aside for their retirement, the bullet was bitten and auto-enrolment – which is compulsion in all but name – was introduced. Persuading people of the need to put money aside to cover the possibility of long-term sickness is even harder. While most feel confident they will reach retirement – even if that doesn’t particularly incline them to save for it – many see long-term sickness as something that happens to other people, not them. This is a very head in the sand attitude. Most people’s houses won’t burn down, be flooded or broken into but most would agree that taking precautions, and getting insurance cover, against all three possibilities is sensible. And, as the statistics introducing this article show, a significant number will suffer long-term sickness and lose their ability to earn as a result.

So an inability to work is obviously a risk that all working people should be prepared for, but most aren’t. Businesses can play a large part in making sure workers avoid being plunged into poverty if they go long-term sick, and the advantages for businesses themselves in terms of the financial cover and early rehabilitation of employees make it worth their while even before the state gets around to deciding they are obliged to.

Read more:
The risk of sickness absence is worth planning for

If you are still struggling to get to grips with auto-enrolling all your staff into pension schemes, you may want to look away now, as it seems to me that more delegation of welfare provision from government to employers and employees is on the way.

Just as the government would like to see everyone having a decent retirement pension it can just as plausibly contend that all citizens should have some self-provision in the event of their inability to work due to long-term sickness. This is the single greatest risk facing any worker – well over two million people are currently receiving state benefits because they are unable to work. With a cost of billions attached, there is a clear motivation for the government to try and shift as much of the cost as possible to the private sector.

Some commentators argue that even if auto-enrolment into sick pay schemes is on its way, it won’t arrive for a long while yet. I disagree, for the following reasons.

In the first place, setting up the infrastructure for employees to auto-enrol into pensions has given the state a template to follow. Although sickness benefits are different, the mechanisms for administering it are already there within HMRC and private providers, and will be within employers, too, courtesy of their auto-enrolment pensions systems.

In addition, public perception of the role of the state in providing benefits is changing. Most now recognise, and many even want, state benefits to provide no more than a safety net to protect people from absolute poverty. We are moving to a position where reliance on the state alone will be to experience the 21st century equivalent of the workhouse.

Last but not least, although the public sector deficit will be eased by auto-enrolment of pensions spending on sickness benefits makes up another sizeable chunk of the public deficit, so the driver to privatise such benefits remains.

Reforms to pensions have created a model that can be replicated with other benefits, even if not exactly. A flat rate universal old age income benefit has been established, means testing has been eradicated to design out penalties for savers and a mechanism has been created to ensure employers are obliged to facilitate a workplace pension. Tax relief on contributions to workplace pensions are firmly established for both employer and worker.

When it comes to sickness benefits, it is difficult to conceive state provision that would not have additional supplements for children. The overall structure is likely to continue to focus on household benefits, which complicates the amounts of cover each individual employee should have. Still, ‘complex’ does not equate to ‘impossible’ and I can easily imagine simple to use, self-service systems that would enable the appropriate level of benefits to be calculated for any individual employee, after allowing for their entitlement to state benefits.

How could auto-enrolment to workplace disability work? By establishing an obligation on employers to facilitate schemes with purchasing within those schemes largely by individuals, but only after some rules-based software is run to establish their precise needs and ensure that they are not overbuying cover. It would not automatically follow that employers would have to contribute towards the cost of benefits – their responsibility might end at setting up the mechanisms for employees to use.

There are issues here that need to be dealt with. Commercially uninsurable schemes and lives may need an insurer of the last resort but there are precedents – for example, NEST was designed to serve this purpose with regard to pensions, and has been joined by other new providers.

There will be voices that say this is all too difficult and we need to let pensions auto-enrolment bed down before even starting to consider other ways in which UK citizens should have protection against situations that can lead to poverty. I believe that the momentum created by pensions auto-enrolment will be used before it has time to diminish. In the same way that we saw a wave of business move from the public to private sectors in the 1980s, benefits could well be subject to a similar wave of privatisation.

Read more:
More auto-enrolment just over the horizon?

Employers who offer group life cover to employees, making a lump sum available to a bereaved family, do so for a number of reasons. Demonstrating you care as an employer is certainly one, and providing a benefit that offers generous tax relief on premiums is another, but it’s also important to consider what needs to happen if one of your employees who is in the scheme dies.

This is where the scheme trustees, who will normally be senior people in companies who have taken on this additional role, comes to the fore. It is their responsibility to determine how lump sums paid out by the scheme’s insurer are to be distributed.
Often distributing benefits is as simple as it seems; if the deceased employee leaves behind a spouse or partner and children, it’s usually them who will receive the benefits provided by the scheme.

But what about more complex personal lives and situations? The late employee may have had children by more than one marriage or outside of the marriage. Or the employee may have died without leaving any obvious beneficiaries. When this happens, it’s the role of the trustee to decide upon the most equitable distribution of the benefit. And it can get complicated.

Of course, your first role as a trustee is to establish who may have a reasonable entitlement to the benefit. This is made more straightforward if employees are encouraged, as a matter of course, to complete a ‘nomination of beneficiary’ form (also known as an ‘expression of wish’) that names the people they would like to benefit and the proportions each person should receive. This is often done when employees join a scheme but almost as often then left alone. The result, if they’re not regularly reviewed, is that an employee’s wishes at the time of their death are completely out of line with what they would have actually wanted.

Although you may know someone as your colleague or employee, there’s no saying that you have any knowledge of their family or personal circumstances. This makes nominations of beneficiaries particularly valuable, because without them you start with a blank piece of paper when trying to establish who the beneficiaries should be. Even if you have a deceased member’s nomination, it’s important to realise that as a trustee, you’re not legally bound to distribute the benefits in accordance with their wishes. Group life schemes are set up under discretionary trusts, and the ‘discretionary’ bit relates to the trustees’ absolute right to exercise their discretion in determining who should benefit according to the scheme’s rules.

You may need to use your discretion if parties emerge who have valid claims of financial dependency on the deceased member of staff. Even if all the possible beneficiaries are known, there may be arguments among them regarding their relative entitlements. When this happens, it’s up to you, the trustee, to unravel the rival claims and do what you think is right.

A recent alternative to taking on the role of trustee and the responsibilities that go with it is a Master Trust as offered by many group life insurers and designed to accommodate a variety of schemes. They’re run by professional trustee firms with a wealth of experience, who also provide useful objectivity in settling on how best to distribute scheme benefits.

Whether you decide to use a Master Trust or set up your own trust and appoint your own trustees, being prepared before a death occurs so that benefits can be distributed quickly to families who may be in sore need of them is important. So encourage your staff to nominate their beneficiaries.

And, if you’re running your own trust, make sure it has a bank account ready to receive your insurer’s payments.

Although nobody really likes thinking about their own mortality, it is better to spend a little time on some basic preparation than being unready if a death occurs and adding to the pressure on families already suffering bereavement.

Read more:
Bereavement in the workplace… the role of a trustee

Since 30 June, all employees with more than 26 weeks service have had the right to request flexible working. For all that the change was trumpeted in the press, it is actually quite a subtle variation on what stood before, when the right was available to parents and carers. There is still no compulsion on employers to accede to requests but they must be able to show that where they are rejected it is in a ‘reasonable manner’. ‘Reasonable’ reasons for declining requests are very broad, from the costs being such as they would damage the business through an inability to meet customer demand to just a lack of work available during the proposed working times.

For a sizeable chunk of the population – those with no job or who would like one that offers full-time work every day rather than limited (or even zero) hours – the right to request flexible working was probably greeted with ironic cheers. Even so, its introduction is a useful indicator of which way the wind is blowing around how more and more people want to work. Employment legislation tends to lag behind the practices of the most forward-thinking employers but ahead of many others. The direction of travel here is clearly towards flexible working becoming first the norm and then the legal right of employees. It’s generally a good idea to operate ahead of regulatory curves – planning now on the basis of what’s probably coming makes more sense than having to make drastic changes you aren’t ready for – and having a flexible approach to flexible working is no exception.

The general trend towards flexible working has come about because of changes in the world we live in. The majority of mothers want (or need) to work where once they would have been more likely to stay at home. Technological advances make it possible for many jobs to be done anywhere, including workers’ homes, where they would once have been possible only at a specific work site. A cliché it may be but change really is the only constant and given its ever-accelerating pace a flexible approach to working is pretty much a necessary virtue, for employers just as much as employees.

Requests for flexible working, both generally and as defined by the new rules, relate to questions of where and when.

Taking the ‘where?’ question first, the ability to work from home is appealing to many people. It might be because they need to keep an eye on children, have a long commute to the workplace that wastes less time if done less often, or have their own particular motive. Sceptical employers might think that an unsupervised employee is likely to be a less productive one, but my experience is exactly the opposite. Although there are distractions in workers’ homes, they are no more intrusive than the distractions that arise at work. It is often easier to give one’s undivided attention to a work task alone at home than to try and concentrate in a busy office or workshop.

There are many more variations around ‘when’ employees could work. Some will like the idea of longer working days compressed into shorter working weeks, say, four ten-hour days rather than five days of eight hours each. Others will favour a shift that starts and finishes early. Ideally from an employer’s perspective, other employees will prefer a shift that starts and finishes late so that there is cover throughout the working day. An efficient way to find this out is to invite employees to find their own counterpart and make simultaneous requests to work flexibly. The employer will then often gain through the working day being extended at each end to accommodate these wishes. The main difficulties arise when the requests for flexible working are all for the same working patterns, so employees should be encouraged to be flexible, and mindful of the business’s needs as well as their own, when putting in their requests.

Beyond the day to day benefits to companies of allowing flexible working, the even bigger advantage it brings is in the quality of the workforce you end up with. You retain good people who might be raising families, phasing their retirement or just put a high value on their work/life balance, all of whom might otherwise feel obliged to go to another employer who fits their circumstances better. The more flexible you can be, the more varied a workforce you will have and the greater the scope to use their varying skills, experience and attributes to handle whatever life throws at your business.

Following rigid forms of working is a recipe for disaster in a world that gets ever more complex. If you show a flexible approach yourself, the chances are your employees will respond in kind. In fact, my own experience suggests you will get back far more in commitment, effort and productivity than you actually ask of them.

Read more:
It is not just your employees who can gain from flexible working

In his latest article he argues that we all need to face up to the inevitable and ensure we have proper plans in place to support our loved ones financially when the time comes.

It’s possible these days to dangle all sorts of benefits in front of employees and prospective employees. Options now can include help with childcare, cycle to work schemes, gym membership, shopping discounts – you name it. But there’s one benefit that I believe should be the first on the list of employers when they’re thinking about what they want to provide and employees considering what they want to be provided with: a benefit paid in the event of them dying.

It’s perhaps not the most obvious choice. People often shy away from even contemplating death, but that’s one reason why it is such an important benefit. As individuals, UK citizens tend to have far less insurance on themselves than their families need.

But why should it be down to employers to fill the gap?

Rather than seeing it as someone else’s problem, employers have a lot to gain by offering death benefits to their employees. Providing it can be seen as a real plus by employees with children of their own or who are responsible for the welfare of their own elderly parents. Quite apart from the cover having a monetary value, providing it marks you out as an employer who cares about your employees and their families, which can have a significant effect on employee morale and your company’s overall brand.

It is also one of the most inexpensive benefits you could provide. The price will vary according to various factors. These will include what your company does, what jobs your employees do within the company, your employees’ ages and where you are based. Some typical costs are shown here.

Manual/factory-based workers

Age Annual cost of £100,000 cover
30 £35.30
40 £63.90
50 £134.30

Office-based workers

Age Annual cost of £100,000 cover
30 £26.50
40 £41.80
50 £96.70

Rather than employees needing to complete complicated forms about their health histories cover will be given automatically, unless the levels of benefits are set particularly high, once they fulfil the eligibility criteria. These criteria are yours to set, but I would recommend simply covering all employees and not restricting membership in any way. Industry statistics show 99.6 per cent of claims are paid and the reason why it is not 100% is down to some employees not fulfilling eligibility criteria that had been set more tightly than intended. However you set it up, your employees will be covered twenty-four hours a day – not just while they are at work – and against all eventualities. In the event of a member’s death, the benefits do not form part of the estate so can be paid very quickly and give the member’s family a vital emergency fund.

Setting up a scheme in the first place used to be a bit of a rigmarole. A trust deed would have to be drawn up, trustees appointed, and the scheme registered with HMRC to obtain the very favourable tax advantages (benefits paid without inheritance tax applying, full tax relief on premiums for the business and not regarded as benefits in kind for employees). Although this is all still a perfectly legitimate way to proceed, many insurers now offer Master Trust facilities, run by professional, independent trustee companies, and a simple application form is all that’s required to get your scheme up and running.

Once you have set up a scheme, there’s little else to do, but this leads many employers into the trap of providing a benefit but then not telling their employees about it. If your employees are unaware of what you have set up for them the point is somewhat lost!

One way in which to maintain their consciousness of their death benefit cover is to ask them each to complete a ‘nomination of beneficiary’ form when they first join the scheme, and then to review it at least annually. Although useful means of reminding your employees of their cover, the primary purpose of these forms is to make it clear who an employee wants to receive the benefit in the event of their death. And reviewing the forms is important because people’s circumstances change over time – they marry, have children, and so on.

The scheme trustees can then use these forms to decide where it is any benefits should be paid. Although the trust must be set up so that trustees retain full discretion as to how benefits are distributed, if the trustees know who the member had in mind it can significantly shorten the time they need to investigate who should receive benefit payments. This could be of vital importance to a family relying on the benefit being paid quickly.

And it’s this point about families relying on this benefit that is at the heart of why I believe life cover needs to be at the top of the list of benefits companies should provide. Other benefits might give more instant gratification, but none will be appreciated more if the need arises. For most employees, thankfully, they will be long retired before they die, but people who die while still working will typically have families who depended on their income. I for one would hate to be in a situation where one of my colleagues died, my company had provided nothing for them, and their family was left to rely on the all too flimsy safety net provided by the State. Make sure your people are in the half of the UK workforce that gets this terrifically efficient benefit.

Read more:
A matter of life and death

In his latest article, John Ritchie, Chief Executive Officer at Ellipse emphasises why this is particularly the case for SMEs and why, even though finding the ‘right’ people isn’t easy, you can’t afford to recruit anyone who doesn’t pull their weight.

Before you can even start searching, you need to consider what your aims are for your business. What is the extent of your ambitions? Even if you have only just set up your business, what is your exit strategy? What is needed to take your business from where it is now to where you want it to be in five years’ time?

If you can answer these questions, you will know if you need to find someone who will ultimately succeed you, or someone with the skills and experience you lack that are needed to help the business develop – or perhaps someone with the potential to become one or the other.

Once you have identified a particular set of skills or experience that your ideal recruit might have, the obvious people to look for might seem to be those who have been in a similar role at another company. My own experience is that however logical this might seem, it doesn’t necessarily follow that such a person will deliver what your own business needs.

They may have a brilliant track record at a big, well-known company, but that doesn’t mean they will be able to repeat the trick for yours. They might have benefited from having a great team around them. They could simply have been lucky in that the circumstances in which they operated at the time might have made it hard to fail. Above all, they may simply be the sort of people who thrive in large corporations but find it hard to succeed working for smaller companies, particularly if they lack the entrepreneurial outlook that those working in small outfits need to have.

I have friends in business who have been looking to grow their companies and brought in people who seem to be the right types to take their companies up to the next level. All too soon, they bitterly regretted it as their company got bogged down in the sort of big company processes that undermine the agility which gives many small businesses their edge.

For me, attitude is more important than skills or experience. People can develop skills and gain experience. Although attitudes can change, they tend to only slowly, if at all. If someone takes the view that their role is to do X and they can’t be expected to do Y, they are less useful to me than someone who might not know all the ropes but is willing to learn and not afraid to make a few mistakes along the way. I would rather take on someone inexperienced but with these attributes:

• bright, so they will learn quickly
• passionate, so they will work hard to get results
• willing to help others, so that as they develop they will in turn develop the people around them
• optimistic realism, so that they will try to find ways in which things can be done rather than reasons why they can’t

When it comes to finding such people, beware relying on interviews alone. It could be that your interviewees seem to have the attributes you are after but when it comes to business it turns out that their greatest talent is in being good at interviews! Use strategies that will give you a real insight into how useful – or not – they might be.

Why not set them a problem to solve before you meet up with them and tell them you’ll expect them to give a presentation of their solution? If numeracy or literacy is vital in the role you are looking to fill, set a task that will demonstrate whether or not they have sufficient abilities in these areas. Ideally, ask someone whose judgement you trust to interview them as well.

While ‘The Apprentice’ may ultimately be a bit of a circus for the cameras, the idea of setting tasks to assess ability is sound, and the episode in every series where Lord Sugar asks some of his business associates to grill the remaining candidates always reveals a wealth of interesting new information.

Psychometric and other personality tests are worth the small investment when compared to the potential cost and aggravation of a wrong hire – like so many services, they can now be accessed online at a cost that makes them accessible for all businesses. Try a few different providers’ tests out on yourself, ask other people you know well to do likewise, and pick the one that delivers the most accurate and insightful results. If the tests reflect true pictures of people you know well, you can trust them to deliver the same for job applicants.

In short, don’t rely on one method or another to screen recruits – aim for a mix that gives you objective as well as subjective information.

However good your recruitment process is, you can still sometimes end up with taking someone on who just isn’t right for your business. When this is the case, don’t delay and let it damage your business – say goodbye to them. And this naturally means that you need to set up contracts that give you and your recruits the opportunity to change your minds if things just don’t work out. At my own company, we have taken on some excellent people – and offloaded some who didn’t fit in – by adopting a ‘temp to permanent’ model as our standard one for new recruits.

Read more:
Find the people that are right for your business

Auto enrolment (AE) is one of the biggest public policy changes of our generation. The Government, which has long wanted to manage its burgeoning bill for providing pensions, has selected employers as the channel to deliver worthwhile retirement pots for the people. For SMEs in particular, picking up this responsibility can seem like a scary prospect, particularly when some of the larger employers – who might be expected to have the resources to take this in their stride – have already been pulled up for failing to implement auto-enrolment correctly.

Given the necessary focus on pensions, it might seem an unnecessary distraction to think about other aspects of your employees’ packages, but a little thought now could pay dividends in the long run – especially if you get someone else to do the thinking for you.

Staying legal is obviously the first priority when it comes to getting through AE successfully, so I’m not advocating that anybody lose sight of this. There are some complex communication obligations involved but there’s also absolutely no need to panic. Give yourself six months before the staging date applicable to your company – when AE kicks in – which is determined by how many employees you have, and get some expert advice.

If you don’t know what staging date applies to your company, you can find out from the Pension Regulator’s website. And if you don’t have a financial adviser already, sites such as www.unbiased.co.uk/business can help point you to some options.

Your adviser will almost certainly point you towards a software solution to ensure you satisfy your legal obligations, but the software should also have the capacity to link seamlessly with other financial benefits, even if these aren’t offered at the moment – you won’t want to face the dilemma of changing your systems or having to operate several stand-alone ones if you later decide to introduce new benefits. In addition, the software should minimise the effort involved in handling data within your company or in reporting to the supervisory authorities – nobody wants, or can afford to get bogged down in red tape. If it sounds like data handling is going to become a chore, don’t be afraid to ask your adviser what else is available.

The same questions need to be considered when selecting your benefit providers. Your pension provider of course needs to be capable of delivering good returns on your company’s and employees’ contributions, but they have to be able to do this within the constraints on charges set by AE regulations. Some of the established pension providers are only looking for large companies’ business on these terms, because they need big volumes to make it viable for them.

The Government anticipated that it may be difficult for some companies to find a pension provider willing to take them on, which is why it set up NEST (National Employment Savings Trust), but this isn’t your only option. Other providers have also stepped in, such as NOW: Pensions and The People’s Pension. Although both are new names in the market, both have considerable track records in handling low-cost pensions generating good returns. NOW: Pensions have successfully run the Danish National Pension for more than 40 years, while The People’s Pension is a new entity set up by B&CE, a not-for profit organisation founded in 1942 originally to provide construction workers’ pensions.

As with pensions, you may need to look outside familiar names when considering other financial benefit providers. Just as your pension arrangements are set up to run with the minimum hassle, you want to get the same from whoever is providing, for example, death and disability cover for your employees, whether that’s now or in the future. As in selecting your pension partner, it’s important to get advice from an independent expert.

So how would I sum up my recommended approach to AE?

1. Get advice. There are pitfalls, but an expert will steer you around them. Doing a DIY job is almost certainly going to be a false economy. Talk to an independent financial adviser.

2. Be prepared. Know your staging date – the date when companies of your size (by number of people) are required to commence AE – and as a rule of thumb give yourself six months to get new systems and processes in place. Make sure AE solutions offered to you make light work of data handling.

3. Benefits are more than just pensions. Yes, your immediate need is to comply with pensions rules once you hit your staging date, but your software should be capable of handling any other benefits you provide now or in the future.

Read more:
Auto-enrolment and benefits – what you need to know