Duty of care (DoC) is a legal requirement for any company, but new research by insurer Chubb reveals a clear correlation between companies that go beyond the minimum DoC requirement enjoying increased profitability, productivity and the ability to attract and retain top talent.
The report, Reworking Duty of Care, based on interviews with 240 managers of European companies with responsibility for employee DoC (HR, employee benefit and risk management personnel) reveals that more than half (57%) of European companies believe that there is a strong link between the quality of their DoC provision and their corporate profitability and productivity.
Significantly, the research also reveals that companies going beyond mere regulatory requirements experience even more positive corporate outcomes and are almost a third more likely to report greater profitability, reduced employee absence and a safer working environment which minimises accidents.
These findings are particularly timely as companies across Europe face the twin pressures of an ageing workforce and a complex economic picture that might suggest cost cutting would have a stronger bottom line impact than investment in DoC.
Not all industries, or employees, are equal
While our study shows that almost two thirds (63%) of European companies have a good understanding of their DoC legal responsibilities, there is considerable sector variance.
The chemicals, telecoms, construction and real estate industries are among those reporting the most significant positive impact of high standards of DoC – with 75% of those surveyed reporting a positive impact on profitability. Companies operating in these industries are typically exposed to more significant occupational hazards and have generally invested time, money and expertise in specialist support.
At the other end of the spectrum, some IT, technology and manufacturing companies do not yet appear to adopt best practice. Retail and education sectors likewise appear only to be meeting minimum DoC requirements. These sectors also have a heightened risk of DoC issues relating to their supply chain partner companies, and working conditions of their employees in developing countries where standards sometimes fall well below what is acceptable in Europe.
A key area of DoC concern highlighted by the research is the risks employees face when travelling on business. A significant proportion of respondents are failing to provide comprehensive business travel insurance for staff, with almost half (49%) providing specific business travel cover for C-suite only. Some 28% offer this insurance to senior managers and a mere 24% extend this cover to all staff. While not every company will have employees at every level engaged in business travel, the figures do reveal a tendency to treat insurance cover for business travel as a perk for senior employees, rather than as a duty of care for staff at all levels – a trend which is at odds with the principle of treating all employees fairly.
In our view, shortcomings like these create risk and this research suggests that companies that fail in providing a consistent level of good-quality care may experience higher work accident rates, higher absenteeism and staff turnover and are at greater risk of under-performing their peers and experiencing reputational and financial loss.
Appetite to improve
European companies can improve many aspects of their DoC offering by seeking support from insurance partners – but currently only one in five (22%) do so. We believe that establishing a clear business case for DoC paves the way for more fruitful engagement between companies HR departments and their insurers. With the interests of employees and employers so clearly aligned, improving DoC via improved insurance solutions is surely a win-win situation for everyone.
Stéphane Baj is regional director - EMEA - A&H Corporate & Affinity at Chubb reports.
