The Cost of Absence for SMEs
According to the Office for National Statistics (ONS), UK workers lost 185.6 million working days to sickness in 2022. For SMEs, even one employee’s absence can disrupt operations significantly.
Providing group medical insurance:
- Speeds up diagnosis and treatment.
- Reduces time away from work.
- Improves long-term employee wellbeing.
How Health Insurance Delivers ROI
1. Reduced Absenteeism
Private healthcare enables staff to bypass NHS waiting lists, meaning they recover and return to work faster.
2. Improved Retention
Employees value private medical insurance as a top perk. Retaining staff reduces recruitment and training costs.
3. Enhanced Productivity
Healthy employees are more engaged and perform better. Plans that include mental health and wellness tools further boost productivity.
4. Employer Branding
Offering PMI helps SMEs stand out in competitive industries.
Cost vs Benefit Analysis
- Average SME PMI cost: £300–£1,000 per employee per year.
- Average cost of replacing an employee: £5,000–£10,000 (CIPD).
- Even if PMI reduces turnover by one or two staff per year, the policy often pays for itself.
Case Example: SME in Leeds
A 25-person marketing firm in Leeds introduced group private health insurance. Within the first year:
- Absence dropped by 20%.
- Staff turnover fell by 15%.
- Recruitment costs decreased by £12,000.
The annual cost of PMI was £8,500 — a clear ROI.
FAQs About ROI of SME Health Insurance
1. Isn’t PMI too expensive for SMEs?
Not necessarily. Policies can be tailored to fit budgets, with options like local hospital lists and shared excess.
2. How do employees value PMI compared to salary?
Research shows employees often value PMI more than a small salary increase because it supports long-term wellbeing.
3. Do SMEs get tax benefits from PMI?
Employer-paid PMI is a taxable benefit, but many SMEs view it as an investment in productivity rather than a cost.
Conclusion
For SMEs, private health insurance is no longer just a “nice-to-have” benefit. It provides tangible ROI by cutting absence, improving retention, and enhancing productivity. Partnering with a health insurance broker helps SMEs find affordable group schemes that deliver maximum impact.
