Worksite financial marketing

Many employers now allow financial firms to promote their products through the workplace, but does this really net the best deals for staff, asks Kirstie Redford

Case studies: Shoosmiths, Hammonds Direct

Article in full

Not every organisation can afford to provide a five-star suite of employer-paid benefits. However, simple economies of scale mean that employers can negotiate some good deals for their staff on voluntary benefits.

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Indeed, many employers now allow financial companies to actively market their products to employees in order to secure discounts on any products staff purchase. Anything from healthcare cash plans and pensions to mortgages and pet insurance can now be offered at a cut price.

The term worksite marketing has become a buzzword in the last few years and some pundits predict that more and more sales will soon be generated this way. However, one big player, Abbey at Work, has recently pulled its worksite marketing activities, saying the cost of promoting financial services wasn’t justified by the amount of business coming in. Steve Ainger, media relations executive at Abbey at Work, explains that it has taken a strategic decision to focus on its share scheme offerings. “As a result, we are realigning our resources to concentrate on this,” he says.

Nevertheless, there appears to be no shortage of providers that believe the worksite marketing model is financially sound and are currently lining up to gain access to employees.

Charles Cotton, reward adviser at the Chartered Institute of Personnel & Development (CIPD), says receiving preferential terms and conditions on products can be positive. However, he adds that promoting financial products comes with a certain responsibility. “If employees are being introduced to financial products, they need to be financially aware. Organisations need to think about educating employees so that they can make more informed choices. This could be through work-based learning or by providing information via the intranet,” he says.

There is also a danger that staff may be able to source a better deal on the high street, so Cotton believes that employers should explain that shopping around could also save staff money.

As many employees are not financially savvy, marketing financial products in the workplace can be an uphill struggle. Simon Bailey, head of marketing at Scottish Equitable Employee Benefits, says: “The problem is that the UK population on the whole is not financially literate so every marketing initiative starts off from a low awareness point.”

Neil Hawkins, national employee communications manager at Friends Provident, believes extra guidance is particularly important when marketing pensions. “With an ever growing choice of funds for members of defined contribution pension schemes, pensions simplification and the responsibility for trustees to ensure that members are making educated informed choices, providing clear and engaging communication is becoming a more important part of the trustee’s role,” he says.

In light of this, some providers offer a whole range of communication support for employers. “The use of branded literature, bespoke presentations from our team of specially-trained communication consultants, and our new member education site, offers financial education across a broad range of money matters,” says Hawkins.

But employers do not want their staff to have to experience a hard sell, so there also has to be an element of trust between provider and employer.

Sarah Overton, personnel manager of benefits at Tesco, says it only allows HSA to come into its stores to speak to staff about its healthcare cash plan because they have such a long-standing relationship.

With 1,700 stores across the UK, Tesco also has to make sure that a provider can give all employees in each of its stores the same treatment. “We need blanket coverage as benefits need to be the same for everyone. HSA has created a bespoke cash plan product for us and makes sure it has the man power to market it at every single store,” she says.

With a low-cost product such as a healthcare cash plan, price differentials from the high street are very important. Overton says that Tesco recently negotiated a better deal with HSA, which led to membership doubling almost overnight. “When we launched this new deal, we backed up HSA’s marketing efforts with a big internal marketing push. This increased take-up from 12,000 to 26,000 [employees],” she explains.

Research carried out by provider Winterthur Life last year found that its worksite programmes conducted among a sample of 600 employees over six months had marked results. After attending group presentations, 75% of non-member employees reported they were very likely to join the plan, while 95% said all their information requirements had been met.

Paul Riddell, PR and communications manager for Winterthur Life, says successful marketing is about making a wide range of services available to staff so they are not just dependent on an information pack. “We make bespoke programmes for our clients to ensure information is communicated in the best way for that business. Blue collar workers have no access to computers so they need a different approach to an office-based firm,” he says.

John Dean, sales and distribution director at HSA, agrees that providers have to tailor marketing methods to each organisation. “Many firms don’t have a big, centralised meeting point for presentations. So e-campaigns and desk drops can be good. However, if employees are not desk-based, direct mail to their home address and pay slip inserts can be effective,” he says.

Many benefits providers use intranet platforms as the focus of their marketing activity. This can be effective as it allows providers to build in supporting information to help guide employees into making informed decisions.

Philip Hutchinson is director of HR and reward consulting at AWD Consulting, which provides an intranet package where staff can choose to buy a range of goods and services with group discounts.

Financial products available through this online offering include mortgages, investments, insurance and credit cards. However, Hutchinson believes it is important marketing literature states that although deals provide good value for money, there may be cheaper products available elsewhere.

“The site provides information for staff to help them make informed decisions, but if they choose to buy a financial product the responsibility to provide information lies with the product provider. The employer is not involved,” he says.

Bailey adds that these online marketing methods could be the way of the future. “New intranet systems are emerging that are cost effective for providers and appeal to staff as they are so accessible,” he says.

This can be key for employees that may be cash rich but time poor, many of whom are prepared to pay a little bit extra for the convenience of accessing products through their workplace rather than spending time shopping around for the best deal. So as long as these interests continue to be met, worksite marketing looks like it is set to stay for the long haul.

Case study: Shoosmiths

Law firm Shoosmiths markets a range of voluntary benefits to its 1,200 staff via its intranet.

Working with employee benefits provider You At Work, it provides over 1,000 discount schemes, including a range of financial products. These include insurance, mortgages and healthcare cash plans. Louise Hadland, the firm’s HR and FM director, says: “It really is a win-win situation. We allow employees to take advantage of these deals without it costing us a penny. The schemes have been really well received by staff.”

In addition, Shoosmiths works with employee benefits provider PeopleValue, which arranges for independent mortgage advisers to come into the workplace for one-to-one meetings with staff. “We just provide a room and organise appointments for employees. The great thing about this is that staff do not have to take time off work to go and arrange their mortgage, so we reap the benefits too,” says Hadland.

However, to make sure it is sourcing the best deals for staff, Hadland adds she asks providers which other companies they work for and then contacts their HR departments to get references. “Our corporate lawyers also look through arrangements to make sure we are providing fair deals,” she explains.

Case study: Hammonds Direct

Conveyancing firm Hammonds Direct has an arrangement with LHF Healthplans to come into the firm to speak to employees every six months.

The firm’s head of HR and development, Marisa Jerrison, says: “We have an area in the staff restaurant where they set up a stand to distribute leaflets about health plans and give freebies out to staff.”

Because not all employees have the time to talk to LHF, the HR department backs these activities up by providing the same information through the organisation’s intranet.

“We also put posters up around the building saying when LHF will be coming in. This is a voluntary product, but one that we believe in, so we feel it’s important staff are aware of its benefits,” says Jerrison.

She also links this marketing to wider initiatives, such as the regular health awareness days the company holds. “We have an internal programme of events that we arrange with our own occupational doctor. LHF send us promotional material to use at such events so that the health plans still have a presence.”