Incentivising SME uptake of health and wellbeing support schemes

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What is the issue?

The Health is Everyone’s Business consultation emphasises the key role of employers in enhancing employee health and wellbeing. This improvement can lead to reduced job loss due to ill-health, lower sickness absence and increased productivity. However, many employers, especially small and medium-sized enterprises (SMEs), struggle with barriers like lack of expertise, time and cost. Large employers are more likely to invest in health initiatives compared to SMEs. To address this, the joint Work and Health Unit commissioned RAND Europe to research incentives for SMEs to invest more in employee health and wellbeing schemes.

How did we help?

The methodology involved a telephone survey with 500 SME employers, 30 in-depth interviews, and a discrete choice experiment. The survey and interviews assessed SMEs'' health concerns, existing health support, and barriers. The experiment tested reactions to hypothetical health scheme scenarios, varying in service types, advice, financial support, payment timing, and administrative requirements. The findings model SME preferences but should be interpreted cautiously due to assumptions like complete awareness, limited scenario details, potential social desirability bias, and exclusion of micro employers. This research was conducted pre-COVID-19 in 2018.

What did we find?

The findings from the research cover various aspects of SMEs' approaches to health and wellbeing, including:

  1. Key Health Concerns: The employers outlined that musculoskeletal conditions and mental health were the top health concerns. These were also found to be the top reasons for sickness absence in the UK.
  2. Current Support Provision: Employers were surveyed about two health and wellbeing scheme types: proactive health promotion and targeted support for employees with health conditions. About 70% of SMEs provide proactive health promotion, with larger SMEs more likely to offer such support. Targeted support for health conditions is less common, especially among smaller SMEs, often due to a perceived lack of need. However, smaller employers, who generally adopt a more informal, 'family' approach to workplace health, expressed a willingness to provide targeted support if needed.
  3. Barriers to Investing: The primary barriers for SMEs in providing health and wellbeing support are lack of expertise (49% of respondents), time or resources (49%), and capital (52%). These factors complicate SMEs’' ability to choose and implement appropriate health programs, even with financial support available.

Using Discrete Choice Experiment, the research uncovers several other findings:

  1. Type of Health Scheme: SMEs showed equal preference for choosing preventative health schemes and those targeted at employees with health conditions. However, they were more inclined to opt for schemes that combined both elements. SMEs with prior experience managing employees with long-term health conditions or disabilities showed a stronger preference for preventative schemes.
  2. Financial Incentives: The experiment indicated that SMEs are more likely to participate in health schemes with higher financial reimbursements, though the increase in participation diminishes with higher reimbursement rates. For example, offering a 25% reimbursement led to a significant increase in uptake, but further increases in reimbursement offered smaller gains in participation. Additionally, the timing of reimbursement payments did not significantly affect SME decisions. However, SMEs' limited understanding of scheme costs and their financial implications could affect their decision-making in real-world scenarios.
  3. Advice and Guidance: The experiment found that providing supplementary advice, either online or via a personal advisor, significantly increased SMEs'' uptake of health support packages. There was no notable difference in effectiveness between online resources and personal advisors. Offering such advice, with a fixed 50% financial reimbursement, increased participation by 7-8 percentage points. Employers showed varied preferences for the type of advice, with some favouring online resources and others personal advisors.
  4. Administrative Requirements: The addition of administrative requirements did not significantly affect SMEs'' decisions to participate in health schemes. However, SMEs emphasized in interviews that such requirements should be reasonable relative to the provided funding and support, suggesting that excessive administration could deter uptake.

What can be done?

This research indicates a potential role for government intervention in SME health and wellbeing support. Despite recognising its importance, SMEs often provide unstructured, reactive support. Financial barriers and limited knowledge about scheme costs and options are major obstacles. Financial incentives and advisory services could increase scheme adoption. Future policy design should balance uptake benefits against delivery costs. Further research could focus on increasing SME awareness and understanding of available options, addressing knowledge, time and financial constraints.


Read the full study