Some would question the wisdom of asking business psychologists with limited knowledge of the protection industry to try to quantify the value of group risk products.
But it can sometimes be useful to see how the industry is perceived from the outside. Furthermore, the chasm between our field and their’s is not as wide as generally imagined. Let us not forget that the term “psychological contract”, which describes the implicit expectations between employer and employee over and above the legal contract, has become pretty standard protection industry jargon.
Anyone wondering whether insurance products can be slotted into existing psychological theory will not be disappointed by Paul Buckley, director of Paul Buckley Associates, a Bristol-based firm of chartered psychologists specialising in consumer behaviour and attitudes. In his opinion, group risk providers can take heart from Herzberg’s Hygiene and Motivational Theory, which cites a good working environment as being one of the main forces to motivate employees.
He also feels the products score via Maslow’s Hierarchy of Needs. This says that the main motivators of people at a basic level are food, drink and sleep but that the next stage up is then security, with status figuring in the next stage up after that. Membership of a group protection scheme can provide valuable security and can also enhance status.
He says: “Money isn’t necessarily a good motivator and people are quite happy if they get a reasonable level of pay. The other little things like clean canteen facilities, toilets and indeed group health insurance can make one employer appeal over another even if the money is a bit less.
“The presence of these factors can lead to employees giving their all because they feel valued and there is evidence to show that this in turn leads to improved morale and productivity. Similarly an absence of them can have a demotivational effect. The key is making employees aware of what they’ve got and if you fail to do this you are wasting your money.”
But Buckley also stresses the potential dangers of “cognitive dissonance”.
People tend to feel uneasy with dealing with the unknown and one of the problems with health insurance and protection is that there is no actual tangibility until the claims stage.
“This is a disadvantage, but you can overcome it by providing free helplines which help employees feel supported,” he continues. “A strong brand name like Bupa can also help reduce cognitive dissonance because people are more likely to feel at ease with a company they think they can trust.”
Kate Keenan, managing director of chartered psychologists Keenan Research, based in Bath in Somerset, also places huge importance on helpline provision. She says: “There are a lot of stress issues at work and people don’t want their bosses to know about anything to do with their mental health, so helplines offering confidential counselling can be very helpful. Indeed they could actually be worth more than the health insurance scheme itself. “
No psychologists were prepared to stick their necks out on whether schemes could pay for themselves through raised morale alone, even if scheme members never had to claim. But most agree that while health products always look good for recruitment purposes, entirely on their own they would probably not make the difference between someone joining or not joining a company.
It is also generally agreed that the most positive impact on loyalty and retention is likely to occur if scheme members witness a colleague benefiting from a claim being paid.
Nevertheless, by the same token, it can be disastrous if a claimant fails to receive a payout they were expecting.
Helen Fisher, director at London-based business psychologists Nicholson McBride, says: “Any kind of health insurance can load up goodwill in the bank but if there are disputed claims you can end up worse off than if you didn’t offer a scheme. Not paying would damage the psychological contract even if the insurer rather than the employer was at fault.
“On a subconscious level people might question the ability of the employer to manage suppliers and even to manage other areas, and it could therefore have a real impact on loyalty.”
While it has to be said that the psychologists have told us little we didn’t know already, the fact that they confirm what most of us believe is certainly encouraging. Those who are concerned that they may simply be a bunch of flatterers will be relieved to learn that their views on pensions were contrastingly negative.